Warren Buffett Likes His Boring Stocks and We Have to Accept It

For the last few years or so, Warren Buffett has had his feet up and watched the dividend payments hit his bank account. He’s one of the greatest investors and he doesn’t want to tap in to any stocks while the market is red-hot. With the recent news of Buffett announcing his latest picks people went all over all the place to what he’d be buying next. It ranged from Disney to PayPal to even Bitcoin. We know better and shouldn’t be surprised that Buffett ended up picking Verizon and Chevron.

The Verizon and Chevron picks were so obvious in front of our eyes, but we kept missing them because they didn’t have the appeal of other options. Chevron and the entire big oil industry are certainly not the most desirable picks on Wall Street these days. However, Chevron is in the classic boat that appeals to Buffett of being among the elite class in a so-called dying industry. Chevron has many opportunities to consolidate and dominate over its peers as long as people still use gas and oil. Contrary to popular belief, the “electric revolution” is not coming as soon as we expect and for those familiar with Buffett’s past work, the Chevron choice was inevitable. With Verizon, it’s a stock that Buffett’s mentor, Ben Graham, would salivate over. The telecom giant’s P/E ratio is a minuscule 13 and has been down over the past year, despite it’s large moat in its space. Verizon continues to grow as the world improves to 5G technology and needs the best service in an increasingly mobile world. Verizon’s downturn is mostly due to its exposure in the cable television world, which has not been to kind to anyone involved. Despite the short term negatives, it is still a phenomenal company that continues to have a near monopoly as its only competitor, AT&T is shifting away from telecom to focus more on media. That gives Verizon room to grow, which gives a sparkle to Buffett’s eye.

Not a doctor, nor do I play one on Twitter. Value investing appreciator. Trying to make sense of wild & crazy stock market.