With nearly $66 billion to his name and counting, it’s no surprise that Warren Buffett is a financial genius and he’s literally one of the best investors of the last century. From Exxon to Walmart, from Coca-Cola to Wells Fargo, the president and CEO of Berkshire Hathaway still plants his dollars deeply into just about every industry, commodity or company that you could consider.
His overall popularity is bolstered by his amazing ability to know what does and doesn’t make a good investment. But even the most astute Buffett follower does not know all of the tricks up his sleeve when it comes to Buffett’s investing strategies. Let’s take a look at 10 little-known investments from the billionaire investor himself.
Disney: When it comes to the cartoon cartel, Buffett has an on-again and off-again relationship as an investor with this company. Jon C. Ogg of Yahoo! Finance fame tells us that as far back as the 1960s, Warren Buffett purchased 5 million shares of the company and had a 4% ownership stake in their stock, and much to his regret he later sold the shares. “It is obvious that [Buffett] still would admit selling Disney was one of his biggest mistakes,” wrote Ogg.
Harley-Davidson: It isn’t too far-fetched to think about Warren Buffett the biker after the Oracle had dealings with Harley-Davidson back in 2009. The motorcycle manufacturer turned to Warren Buffett when struggling in a downtrodden economy. The billionaire invested $300 million in senior unsecured notes. They had a 15% APR. The financial aid offered by Warren Buffett, according to The Motley Fool’s Dan Caplinger, “allowed Harley to keep offering financing to its customers, which was crucial to help it survive the recession.”
American Express: Over 50 years ago, the credit card conglomerate was a victim of the “salad oil scandal.” The value of the stock plummeted once a vegetable oil manufacturer actually decided to water down its product in order to obtain loan collateral. A young Warren Buffett noticed this and purchased $13 million worth of American Express stock and those shares are currently valued at $7.8 billion today. This is Warren Buffett’s third largest investment throughout his career, according to Brian Reed of InvestingAnswers.
Chinese Electric Cars: Why do people consider Buffett so enigmatic? Mainly because he is often contradictory. He’s quite famous for ignoring and passing over the dot com industry and the tech bubble. But Buffett did do a slight 180° turn back in 2008. He purchased 10% of BYD stock for $230 million. Although the venture was ultimately successful, CNNMoney’s Mark Gunther told us that Buffett finally went against his better judgment when investing in the battery and electric car maker in China. “I don’t know anything about cellphones or batteries,” said Buffett. “And I don’t know how cars work.”
Alex Rodriguez & Mike Tyson: There’s no question that Warren Buffett is an expert when it comes to investing in commodities and companies, but did you know that he also invests in people too? Berkshire Hathaway paid for the disability coverage for New York Yankees slugger Alex Rodriguez and he even bought a life insurance contract for Mike Tyson, the former heavyweight champion. The good financial sportsmanship from Warren Buffett netted him “tens of billions of dollars in long-term funds for Berkshire to invest,” said the Wall Street Journal’s Serena Ng and Erik Holm.
Pepsi: Proving once again that the soda loving billionaire wouldn’t be content by just owning Dr. Pepper and Coke, Warren Buffett was once a financial backer for the Pepsi sweepstakes, which was bound to fail. Jordan Wathen of The Motley Fool fame, in 2003, wrote about the soft drink company having its Billion Dollars Sweepstakes, but could not actually afford the losses, even though none of the 100 participants in the contest had over a one in 1 million chance of actually winning.
Pepsi was grateful that nobody actually one, because Warren Buffett and Berkshire Hathaway paid less than $10 million to insure the risks, cashed in quite nicely on the premiums and “enjoyed the proceeds,” wrote Wathen.
Chocolate: It’s no secret that Warren Buffett has a sweet tooth. He owns See’s Candies, Dairy Queen and has owned shares of Coca-Cola since the late 1980s. At one time Warren Buffett bought up shares of a struggling confectioner called Rockwood & Co., and paid $34 each. He then sold those shares back to the company for $36 in their own cocoa beans, then later turned around and sold the beans to outside buyers for $36 each.
“The process netted [Berkshire Hathaway] an instantaneous return of about 6%,” wrote Wathen. “Considering the transaction could be done in less than a week, it worked out to a sky-high annualized return.”
Manhattan Real Estate: At one time Warren Buffett made his move into Manhattan real estate by buying a string of vacant retail shops that were adjacent to New York University. These properties were situated in lower Manhattan, and they weren’t fairing well when the bubble for commercial real estate popped. Buffett recognized the potential in this investment, and “the property location was also superb: NYU wasn’t going anywhere,” said Buffett in a recent letter to shareholders.
Steven Perlberg of Business Insider reported that the annual distributions from the purchase worth $1 million in 1993 are now more than 35% of the original investment. (Several successful businesses have since leased the locations.)
Silver: All that glitters is not gold, and Warren Buffett should have really reconsidered this adage after abandoning a lucrative silver investment. He’s long been quite adamant about avoiding gold as an investment opportunity, but he once gave silver a try back in 1997. At the time, he had 37% of the known silver on the planet, and purchased it for as low as four dollars per ounce, wrote Wathen.
“Unfortunately for Buffett, this is one area where he made a mistake,” noted the writer. Buffett eventually sold his silver for about triple the price – which seemed like a good idea at the time. But years later the precious metal actually sold for almost $50 an ounce.
Farmland: Buffett tells us that he knows nothing about agriculture, but that did not prevent him from buying a 400 acre farm for $280,000 in the 1980s.
“I needed no unusual knowledge or intelligence to conclude that the investment had no downside and potentially had substantial upside,” said Buffett in an annual report in 2013. “There would, of course, be the occasional bad crop and prices would sometimes disappoint. But so what? There would be some unusually good years as well, and I would never be under any pressure to sell the property.”
According to Warren Buffett, the farm today is worth more than five times its original value, and triple earnings to match – even if farming still isn’t his cup of tea. “I still know nothing about farming and recently made just my second visit to the farm,” admitted Buffett.