3 Stocks A Young Warren Buffet Would Buy For 50% Returns

Back in August, we talked about the three Buffett style stocks, one of which is up 20% since then, but we’ve dug even deeper this time. Here are three more stocks Warren Buffet wants to buy. 

Warren Buffett’s top holdings are in some serious trouble. Three of his top five holdings are down more than 10% year to date, while the S&P 500 is roughly flat.

His top holding, Wells Fargo (NYSE: WFC), is facing pressure from low-interest rates and the potential slowdown in mortgage loan originations once rates do rise. People just aren’t drinking soft drinks, hurting his number two holding, Coca-Cola (NYSE: KO).

On down the line, International Business Machines (NYSE: IBM) has been hammered due to the continued decline in demand for personal computers. American Express (NYSE: AXP) is losing its prestige as retailers dump the brand for MasterCard (NYSE: MA) and Visa (NYSE: V).

And finally Wal-Mart (NYSE: WMT), another Buffett holding, is losing market share to smaller retail startups and Amazon.com (NASDAQ: AMZN).

All five are facing serious headwinds. But at this point, does it really make sense for Buffett to sell?

He’s up magnitudes on his investments in these top five stocks and they’re still sending him a healthy dividend check each quarter — roughly $500 million.

If he does dump these stocks he’ll take a large tax hit — After all, he invested in Coke when it was trading at less than $3 a share and bought into Wells Fargo when it was a $2 billion company — now a $275 billion mega bank.

But he’d also be forced to find something else to buy and with $70 billion invested in these five stocks, there’s only a handful of mega caps that he could invest in without materially moving the market.

It’s not worth the hassle at this point. That doesn’t mean that Buffett is happy with the paltry stock returns these holdings are offering. If he just had less money …

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