Warren Buffett is truly the greatest investor of our lifetime. There is no one that even comes close to the 3,700,000% returns he generated between 1965 and 2022. That’s a return of almost 20% a year or twice that of the S&P 500 index.

It’s why investors watch his every move. What stocks does he buy? Which ones does he sell? All of these Warren Buffett stocks are scrupulously pored over like some medium reading tea leaves divining what it all means. It’s also why tens of thousands of investors make the pilgrimage to Omaha every year just to hear what pearls of wisdom may spill forth from his lips.

Do as I Say, Not as I Do

Yet part of his success comes from being able to do things unavailable to the average investor. Buffett doesn’t have to report his trades promptly as other money managers do. The Securities & Exchange Commission gives him (and certain other billionaire investors) special privileges to report trades well after the fact to ensure he gets the best price. 

Companies also give him special deals for investing in their stock. At the height of the global financial crisis in 2008, Buffett invested $5 billion in Goldman Sachs (NYSE:GS) preferred stock that would pay a 10% annual dividend. It stabilized the company, but Buffett stipulated Goldman insiders not sell their shares before he did. He also got an extra $5 billion worth of stock at $115 per share when Goldman was offering new shares at $123 a share. And when Goldman Sachs bought back the preferred shares from Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B), they paid him a special, one-time dividend of $500 million.

Buffett has also invested in derivatives despite calling them “weapons of financial mass destruction.” 

So, while he does things the average retail investor can’t, they can replicate his success in many ways. Let’s look at a few of them.

Go Big or Go Home

Although there are several dozen stocks in Berkshire’s portfolio, it’s clear Buffett likes to make big, selected bets. Giant ones, in fact.

Apple (NASDAQ:AAPL), of course, is his biggest holding. It comprises almost 46% of Berkshire’s total $799 billion portfolio. That’s 5.5 times more than his next biggest stock. Buffett has sure come a long way for someone who once swore off tech stocks because he didn’t understand them.

But he owns more Bank of America (NYSE:BAC) stock than any other company. As of September 2023, he held more than 1.03 billion shares of the banking behemoth. And despite getting shaken out of several other bank stocks earlier this year as it appeared the financial system was wobbling, Buffett didn’t sell a single Bank of America share. In fact, he bought 22.8 million shares more in the first quarter.

Buffett also owns 25% of Occidental Petroleum (NYSE:OXY) and has permission from the Securities & Exchange Commission to buy as much as 50% of the business.

Buffett makes these big bets on big companies because he isn’t a fan of diversification. He told Berkshire shareholders in 1996, “diversification is, as practiced generally, makes very little sense for anyone that knows what they’re doing. Diversification is a protection against ignorance.” He said investing in just three stocks is probably all anyone needs to do.

Get Paid for Owning Stocks

Buffett also loves dividend stocks. Of the 49 stocks in Buffett’s portfolio, 31 pay dividends. And in 2023 alone, Berkshire Hathaway will collect over $5.7 billion in dividend payments. Half of that will come from just three stocks. Three-quarters come from five companies.

Dividends have proved over time they outperform non-dividend-paying stocks. Going all the way back to 1930, dividend stocks in the S&P 500 have never had a losing decade, not through world wars and global pandemics or recessions and depressions.

It’s somewhat ironic then that Buffett will not allow Berkshire Hathaway to pay a dividend. He has rebuffed the idea anytime it’s been broached.

Buy What You Know

Although Buffett has sometimes ventured into the financial markets’ arcana, it’s well known he prefers to buy simple businesses that are easy to understand and generate lots of cash.

It’s why Coca-Cola (NYSE:KO) is the oldest stock in the Berkshire portfolio. Buffett first bought it in 1988 and amassed a holding of 400 million shares. His position represents over 9% of Coke stock (some $23.4 billion) and is worth just under 7% of Berkshire’s total value.

Same with American Express (NYSE:AXP). Even though he hasn’t bought shares of the credit card company since the late 1990s, it has also grown to account for almost 7% of his portfolio. Buffett said, “You can’t create another American Express.”

Notwithstanding the foregoing, there is one stock Buffett loves more than any other. Any chance he can buy this stock, he will scoop it up. He has spent more money on this one company than any of those other stocks he owns.

One Stock to Rule Them All

Every single quarter for the last five years, Warren Buffett bought shares of the one business he knows better than any other: Berkshire Hathaway. 

Now, it’s not traditional stock purchases like those of Apple or Bank of America. Rather, it is share repurchases, and Buffett has been buying back Berkshire stock hand over fist. For the last 20 straight quarters, he spent over $71 billion on the stock.

Notably, before 2017, Buffett didn’t buy back a single share of Berkshire Hathaway. That’s because until then, he had an impossible hurdle to get over. The stock could only be repurchased if it fell to 120% of its book value. That just didn’t happen.

In July 2017, though, the board of directors said that if Buffett and executive vice chairman Charlie Munger agreed the stock was trading below its intrinsic value, then Berkshire stock could be bought. They can buy back shares if Berkshire holds at least $30 billion worth of cash, equivalents, and Treasury bills.

While Buffett may love Apple stock so much that it accounts for half of his portfolio, it is crystal clear he loves Berkshire Hathaway stock even more.

On the date of publication, Rich Duprey held a LONG position in KO stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.