Berkshire Hathaway Inc. (BRK.B), Discover Financial Services (DFS): Warren Buffett’s Next Big Buy

But should we even bother guessing?
As much fun as I have trying to guess at Buffett’s next big stock buy or acquisition (don’t lie, you love it too!), it’s worth wondering what, if anything, we get out of this guessing game. There’s no prize for picking Buffett’s next buy before he does. And, if the Buffett buy is a full takeover of a company you own, then the outcome is a booby-prize that turns long-term investors into short-term shareholders and takes a good company off the market.

On the other hand, the game itself can be instructive. Buffett has been one of the most successful investors of our time, so it’s hard to say that it’s a bad idea to put our Buffett glasses on and try to look at the market as Buffett might.

I’ll go on the record saying that, when Berkshire Hathaway Inc. (NYSE:BRK.B) does reveal the position, it’s likely that my guesses above will probably prove to be wrong. But in thinking through what Buffett might look to buy, I came up with a few more stocks to add to my own watchlist.

So, with that, I’ll kick it over to you: What do you think Buffett might be buying? As you think that through, bear in mind that key components to Buffett’s investment process are:

Simple, understandable, businesses within his circle of competence.

A track record of strong earnings and returns on equity.

A “fair” price (meaning that he’s careful not to overpay, but isn’t tethered solely to bargain valuations).

The article Warren Buffett’s Next Big Buy originally appeared on Fool.com and is written by Matt Koppenheffer.

Matt Koppenheffer owns shares of Berkshire Hathaway, JPMorgan Chase & Co (NYSE:JPM)., and The Clorox Company. The Motley Fool recommends American Express, Berkshire Hathaway, Coca-Cola, DirecTV, MasterCard, Visa, and Wells Fargo. The Motley Fool owns shares of Berkshire Hathaway, International Business Machines., JPMorgan Chase & Co., MasterCard, Visa, and Wells Fargo.

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