10 Companies Billionaires Like Jeff Bezos and Warren Buffett Are Investing To Hedge Against Inflation
This will give you some ideas for your future investments.
While some economists believe that inflation in America may have reached a tipping point, it remains at 8.3% in April 2022. Under these conditions, investing your money in performing assets is a must if you want to protect your purchasing power over the long term.
Unfortunately, many people do not dare to invest in the stock market, because they are afraid of losing money by making bad company choices. In the end, doing nothing is the same as losing money directly. So you need to take action.
To give you some ideas, and some reassurance, you can look at what companies billionaires like Jeff Bezos or Warren Buffett are investing their money in as high inflation looks set to persist.
Of course, you shouldn't pick companies just because Warren Buffett or Jeff Bezos picked them. But it will give you some interesting food for thought. Because if these billionaires have succeeded in building such fortunes, it is not without reason. They know how to maximize the risk/reward ratio when they invest. Knowing that they have invested in a company can therefore be read as a sign that you could do it too.
Electronic payment: Block
Specializing in cashless payments, Block (formerly Square) is considered one of the best to invest in right now by many billionaire investors. This is an industry that has seen tremendous growth and is expected to continue to do so in the future.
Block is betting on the future success of Bitcoin as well, while its founder and CEO Jack Dorsey is a committed Bitcoiner.
Interestingly, Block has experienced a significant correction since the beginning of the year as has the entire tech sector in America. The current price seems to be an interesting entry point:
Health: Teladoc Health
Experts say that anything related to the healthcare sector is ideal for investment. The company offers virtual consultations, which are gaining popularity and, according to experts, will continue to grow in the coming years.
Pets: Trupanion
This company is completely dedicated to pets and their well-being, which makes it an excellent choice because, according to the American Pet Products Association, it is estimated that nearly $110 billion will be spent on pets by the end of 2022.
And this figure is likely to grow even more in the future, as more and more isolated people in our society turn to their pets for which they are willing to spend more and more money.
Sustainability in food: Vital Farms
Jeff Bezos invested $32 million in Vital Farms, which produces free-range eggs. The goal in the future was to eradicate cruelty in food production. Jeff Bezos also invests in synthetic meat companies. He seems to give credence to experts who believe that much of the food of the future will be created in laboratories and with producers who focus on more humane and less polluting production.
If Jeff Bezos believes in this sector, there is bound to be an opportunity here.
Technology: Apple
First American stock market valuation, Apple is a must in the Tech world. A company that continues to perform no matter what. And this should continue in the future as the brand has created a community of fans willing to do anything to buy its products. Pricing power is in Apple's favor, which is essential in the context of high inflation.
Warren Buffett is constantly strengthening his position in Apple, which he ranks among the four giants of Berkshire Hathaway, while Apple represents 44% of his company's portfolio.
Investing in Apple is therefore more than ever a smart option. A smart option and full of guarantees.
Car rental: Hertz
American billionaire investor Brian Higgins, head of King Street Capital Management, believes strongly in Hertz for the future and has taken a stake of 327.4 million dollars, which represents 28.3% of its portfolio.
Hertz had made a lot of noise at the end of 2021 by announcing a mega-order of Tesla cars for its fleet. Hertz had indeed placed an order for 100,000 electric cars from Elon Musk's company by the end of 2022.
Health: Pfizer
Andrew Law, of Caxton Associates, had a good idea when he invested $141.2 million in Pfizer, which represents 14.4% of his portfolio. Pfizer has since totally exploded on the stock market by being among the first to produce a vaccine against COVID-19 using mRNA technology. This is a very promising technology that Pfizer intends to use to treat other diseases in the future.
With about $32 billion in cash from the sale of its COVID-19 vaccine and antiviral, Pfizer will buy migraine treatment company Biohaven for $11.6 billion, its largest acquisition since 2016.
Investing in Pfizer looks to be attractive for the future.
Consumers: Procter & Gamble
Procter & Gamble is an American multinational consumer goods company specializing in personal care and beauty products. Billionaire investor Ray Dalio, who manages Bridgewater Associates, has an $848 million stake in Procter & Gamble, which represents 4.9% of his portfolio.
Investing in Procter & Gamble can be an interesting strategy to diversify your investments in the equity market.
Technology: Amazon
Amazon has been undergoing a heavy correction since the beginning of the year, just like the whole Tech sector in America. However, the prospects of the company founded by Jeff Bezos seem excellent. Amazon is a leader in many areas. The company should continue to expand its influence on the world and the current price looks like an attractive entry point.
Stephen Mandel of Lone Pine Capital has a $2.1 billion stake in Amazon. Warren Buffett also has a stake in Amazon, to the tune of $1.6 billion.
Banking: JPMorgan, Goldman Sachs, Bank Of America
When high inflation is persistent, there is one sector that is sure to do well: banking. Warren Buffett is not wrong. He holds a 46 billion dollar stake in Bank Of America, which represents 12% of his portfolio.
JPMorgan, Goldman Sachs, or Wells Fargo can be good choices given the current and future economic context for the coming months.
Final Thoughts
The main purpose of this article was to give you some investment ideas to dare to take the plunge and get into the stock market while high inflation will persist in the months to come. Knowing that billionaires are investing in these companies should make you do some research on your own.
Because you should never forget that at the end of the day, it is always your money that is at stake when you invest. So you should only invest in companies that you believe in. This is part of Elon Musk's 2 fundamental tips on the stock market, and it is something that will ensure that you never have regrets.
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