Home » sin stocks » Sin Stocks Report: Summer of Sin #13 — Does Warren Buffett Own Sin Stocks?

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One way that investors can decide whether or not specific stocks are right for them is to see if other investors own that stock too. So you might be wondering, does Warren Buffett own sin stocks?

Does Warren Buffett Own Sin Stocks?

It’s dangerous to be a copycat in investing. After all, the person you are copying could have jumped into an investment at a different time (and therefore at a better price). That said, it can help to know when other investors are investing in something. Surely if it’s good enough for Warren Buffett’s portfolio, it may be good enough for yours, right?

Warren Buffett owns the Berkshire Hathaway portfolio, and you can find the Berkshire Hathaway holdings here.

At first glance, Buffett’s Berkshire Hathaway portfolio does not contain any overt sin stocks, such as the big ones like alcohol sin stocks, tobacco sin stocks, or gambling sin stocks.

And that makes sense; it fits with Buffett’s style and approach as a value investor who tends to invest only in things he understands and those that have a long-term value. (That’s not to say that sin stocks don’t have these; they’re just not right for him.)

However, we do see some interesting things in his portfolio that are in fact related to sin stocks in some interesting but unexpected ways.

The first group of companies related to sin stocks are some complicated corporate histories tied to sin:

  1. First is the ownership of Kraft and Mondelez. It’s confusing but the short story is: Kraft Foods was acquired by tobacco sin stock Philip Morris and then was later sold in 2007, months before Berkshire Hathaway announced its large holdings of Kraft. Then Kraft split into two companies, one of which became Mondelez. Therefore, Berkshire Hathaway owns two grocery companies that, at one point (possibly during ownership) were one company owned by a cigarette maker. After selling Kraft, that cigarette maker also went on to split into two as well, becoming Philip Morris International (PM) and Philip Morris USA, which later rebranded as Altria (MO). Yeah, it’s confusing. So, not really a sin stock but it has roots in a sin stock.
  2. Second is General Motors, which has provided military vehicles in the past, as well as selling the Hummer, the consumer version of AM General’s military vehicle Humvee, which GM bought acquired the rights to sell. So, although General Motors may not strictly be a sin stock at this time, it was a defense sin stock and still sells defense-inspired products.

The second group of companies related to sin stocks is Buffett’s ownership of companies like American Airlines, Delta Airlines, United Airlines, Southwest Airlines, Apple, Coca-Cola, Wells Fargo, and Monsanto. While none of these companies are strictly sin stocks, many of them are borderline sin stocks because they are reviled for various reasons — from providing horrible customer service (airlines) to their sweatshop products (Apple) to their sugary recipes tied to obesity (Coca-Cola) to their genetically modified products (Monsanto).

The third group of companies related to sin stocks — and the most obvious current sins stocks — is Buffett’s ownership of General Electric (GE) and IBM (IBM). You may not realize it but both of these are conflict sin stocks or defense sin stocks because they sell products and services to militaries.

So, does Buffett invest in sin stocks? Although he may not invest in the most notorious sin stocks, his portfolio contains some defense sin stocks as well as the ghosts of past or future sin stocks!

(Disclaimer: This information is accurate as of the time of this writing. Be aware that investors may make buying or selling decisions at any time.)

DISCLAIMER

Nothing on this site is a recommendation because, hey, I can't read your mind and I don't know what you have in your portfolio, and I'm not a licensed financial advisor. So never EVER trade without doing your due diligence. If you want more information about this fascinating topic, please check out the Sin Stocks Disclaimer page which basically says the same thing but more emphatically.