Warren Buffett's new 13F is out — and he's leaning on these 4 big holdings to fight white-hot inflation

Price levels are on the rise. In January, U.S. consumer prices surged 6.4% from a year ago — down from 9.1% in June 2022 but still worryingly high.

Spiking inflation has severe consequences for your cash savings.

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Fortunately, investing legend Warren Buffett has plenty of advice on what to own when consumer prices spike.

In a 1981 letter to shareholders, Buffett highlighted two business traits that investors should look for when trying to fight inflation: 1) the power to increase prices easily, and 2) the ability to take on more business without having to spend excessively.

Here are four Berkshire holdings that largely boast those characteristics.

American Express (AXP)

In 2021, American Express demonstrated its pricing power as it raised the annual fee on its Platinum Card from $550 to $695.

The company also stands to directly benefit in an inflationary environment.

American Express makes most of its money through discount fees — merchants are charged a percentage of every Amex card transaction. As the price of goods and services increases, the company gets to take a cut of larger bills.

Business is booming. In 2022, the company’s revenue jumped 25% year over year to $52.9 billion.

American Express is the fourth-largest holding at Berkshire Hathaway. Owning 151.6 million shares of AXP, Berkshire’s stake is worth around $27.2 billion.

Berkshire also owns shares of American Express competitors Visa and Mastercard, although the positions are much smaller.

American Express shares currently offer a dividend yield of 1.2%.

Coca-Cola (KO)

Coca-Cola is a classic example of a recession-resistant business. Whether the economy is booming or struggling, a can of Coke is affordable to most people.

The company’s entrenched market position, massive scale, and portfolio of iconic brands — including names like Sprite, Fresca, Dasani and Smartwater — give it plenty of pricing power.

Add solid geographic diversification — its products are sold in more than 200 countries and territories around the globe — and it’s clear that Coca-Cola can thrive through thick and thin. After all, the company went public more than 100 years ago.

Buffett has held Coca-Cola in his portfolio since the late ’80s. Today, Berkshire owns 400 million shares of the company, worth approximately $23.7 billion.

You can lock in a dividend yield of 3.0% on Coca-Cola's shares at current prices.

Read more: Rich young Americans have lost confidence in the stock market — and are betting on these 3 assets instead. Get in now for strong long-term tailwinds

Apple (AAPL)

No one who spends $1,600 for a fully decked-out iPhone 14 Pro Max would call it a steal. But consumers love splurging on Apple products anyway.

Earlier this month, management revealed that the company’s active installed base of hardware has surpassed two billion devices.

While competitors offer cheaper devices, millions of users don’t want to live outside of the Apple ecosystem. The ecosystem acts as an economic moat, allowing the company to earn oversized profits.

It also means that as inflation spikes, Apple can pass higher costs to its global consumer base without worrying too much about a drop in sales volume.

Today, Apple is Buffett’s largest publicly traded holding, representing more than 40% of Berkshire’s portfolio by market value. Of course, the sheer increase in Apple’s stock price is one of the reasons for that concentration. Over the past five years, shares of the tech gorilla have surged more than 250%.

Apple currently offers a dividend yield of 0.6%.

Chevron (CVX)

One of Buffett’s big moves in 2022 was loading up on Chevron. According to an SEC filing, Berkshire owned $29.3 billion of the energy giant as of Dec. 31 — a significant jump from its stake of $4.5 billion at the end of 2021.

Today, Chevron represents the third-largest public holding at Berkshire.

It’s not difficult to understand why. Even though the oil business is capital intensive, it tends to do very well during periods of high inflation.

Oil — the most heavily traded commodity globally — shot up in the first half of 2022. While it pulled back in the second half, the supply shock caused by Russia’s invasion of Ukraine could keep the commodity in demand.

Strong oil prices benefit oil producers. Chevron reported earnings of $35.5 billion for 2022, which represented a 127% increase from 2021.

The stock is up more than 25% over the last 12 months.

The company returns cash to investors, too. Paying quarterly dividends of $1.51 per share, Chevron has an annual yield of 3.6%.

A better way to shockproof?

Of course, picking good stocks isn't the only way to protect your portfolio.

Amid hot inflation and the uncertain economy, moguls are still finding ways to effectively invest their millions outside of the stock market.

Prime commercial real estate, for example, has outperformed the S&P 500 over a 25-year period. With the help of new platforms, these kinds of opportunities are now available to retail investors. Not just the ultra rich.

With a single investment, investors can own institutional-quality properties leased by brands like CVS, Kroger and Walmart — and collect stable grocery store-anchored income on a quarterly basis.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.