“Charlie [Munger, the late Vice Chairman Berkshire Hathaway], in 1965, promptly advised me [Warren Buffett]: “Warren, forget about ever buying another company like Berkshire. But now that you control Berkshire, add to it wonderful businesses purchased at fair prices and give up buying fair businesses at wonderful prices. In other words, abandon everything you learned from your hero, Ben Graham. It works but only when practiced at small scale.” ~ Warren Buffett

Berkshire’s biggest stock holdings are all among the top dogs in their respective industries. Many of them have another attribute that billionaire investor Warren Buffett loved — capital return programs of either paying dividends or repurchasing shares of their stock.

Berkshire, under Buffett, invested in companies that were good values (“wonderful businesses purchased at fair prices”) and had attractive capital return programs through dividends payments and share buybacks.

As an individual investor, it’s important to find the types of companies and sectors you like. It’s also vital to make sure you align your investments with your risk tolerance.

Buffett has often said that Berkshire purposely keeps a massive cash position and is conservative with its investments, but that’s because capital preservation and limiting downside risk are integral parts of his philosophy.

If you have a high risk tolerance or are multiple decades away from retirement, taking on more risk could make sense for you. But only if you are comfortable with risk and have the patience to hold onto stocks through periods of volatility.

Source:  https://www.fool.com/investing/2024/03/10/dividend-stocks-majority-warren-buffett-berkshire/