I own about 30 stocks in my portfolio, but the position sizes aren't exactly equal. Some are relatively speculative positions that make up 0.1% or 0.2% of the total, but some are much larger. 2021 was a rather active year of investment activity for me, plus many of my stock positions dramatically outperformed the market while others did the exact opposite.
With that in mind, here are my five largest stock positions as we head into 2022, followed by some of the reasons why I'm so confident in each of them.
Company (Symbol) | Sector |
|---|---|
Empire State Realty Trust (ESRT 1.02%) | Real Estate |
Boston Omaha Corporation (BOC -0.56%) | Financials |
General Motors (GM 2.41%) | Consumer Goods |
Howard Hughes Corporation (HHH 0.58%) | Real Estate |
Bank of America (BAC 0.60%) | Financials |
Top five positions, in order from greatest to least, as of 1/3/2022.
Why I have so much of my own money in these stocks
Here's a quick, high-level overview of why I love each of these stocks enough to have so much of my money invested in them. In order from largest position to smallest:
1. Empire State Realty Trust
I didn't plan on Empire State Realty Trust becoming my largest investment. I did, however, invest heavily in the real estate investment trust (REIT) during the early 2020 COVID-19 crash, and the stock is about 70% higher than my cost basis. But I think it's still a tremendous value.
Image source: Getty Images.
Empire State Realty Trust is an office REIT that owns the iconic Empire State Building, as well as about a dozen other properties in the greater NYC area. Not only does it trade for a significant discount to the replacement value of its real estate assets, but the Empire State Building gives the business a unique component -- specifically, the observatory on top of it, which has been a must-do tourist attraction for decades and just underwent a massive renovation to improve the space (and revenue) in 2019.
As New York City gradually returns to normalcy in 2022, there could be plenty of upside ahead for patient investors.
2. Boston Omaha Corporation
Boston Omaha often draws comparisons to an early stage Berkshire Hathaway (BRK.A 0.32%) (BRK.B 0.29%), and it's easy to see why. The company's co-CEOs are following Warren Buffett's playbook for conglomerate building with a portfolio of wholly owned businesses, minority stakes, and common stocks. And it helps the comparison that one of the CEOs is actually Buffett's grandnephew.
With a sub-$1 billion market cap and an impressive track record of capital allocation so far, the sky is the limit. It's rare to find a company with such massive long-term compounding potential that is engaged in relatively low-risk businesses, and that's why I've invested heavily in Boston Omaha in recent years.
3. General Motors
I think investors are dramatically underestimating the potential of the "legacy" automakers in theelectric (EV) and autonomous vehicle business, and General Motors in particular. The company is investing heavily in its EVs, and early indications from the recently released Hummer electric truck are very promising. With the mass-market Silverado EV set to be released in the near future, and many other models in the works, GM could leverage its massive brand loyalty into some high-margin EVs.
And don't forget that GM is also majority owner of Cruise, which is perhaps the most promising player in autonomous vehicle technology. The autonomous vehicle total addressable market is estimated to be trillions of dollars in size, if you include commercial/military applications and robo-taxi fleets, and Cruise has the potential to build a big market share in this young industry.
4. Howard Hughes Corporation
If you aren't familiar, think of Howard Hughes Corporation as a real-life version of the video game Sim City. The company buys large plots of land (think tens of thousands of acres), sells land in small increments to residential developers, and then develops commercial properties to fill demand caused by the homes being built.
Recently, Howard Hughes has been making big moves. It acquired a massive tract of land in the Phoenix, Arizona area and plans to start a new master-planned community from scratch. Plus, the company finally got approval for a new high-rise tower at the New York Seaport district after years of back-and-forth.
5. Bank of America
Of the stocks on this list, Bank of America is the one I've owned the longest. My investment in Bank of America originated not long after the dust settled from the financial crisis, and my general thesis was that CEO Brian Moynihan was making all the right moves and that the bank's long-term return potential was far greater than its minuscule valuation reflected.
I generally still feel the same way today. The bank's asset quality, efficiency, and overall operation are in the same league as industry leaders like JPMorgan Chase (JPM 0.80%), but at a much lower valuation. And, with a high proportion of non-interest-bearing deposits, Bank of America stands to benefit more than most if interest rates start to rise.
Just one part of my investment approach
As you can see, my largest positions aren't exactly the most exciting high-growth stocks in the market. But that's by design. I generally consider myself to be more of a value investor, and that's especially true in my retirement accounts, which is where most of these stocks are held.
Having said that, it's important to point out that the largest of these positions makes up less than 6% of my total portfolio and all five together combine for about 20% of it. I own about 30 stocks in all, so my portfolio isn't exactly top-heavy.
The bottom line is that there are many different investment styles, and no single "right" way to go. This is what works for me, and I've designed my top holdings to be the right combination of growth potential and volatility for my goals.
JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Matthew Frankel, CFP® owns Bank of America, Berkshire Hathaway (B shares), Boston Omaha Corporation, Empire State Realty Trust, General Motors, and The Howard Hughes Corporation. The Motley Fool owns and recommends Berkshire Hathaway (B shares), Boston Omaha Corporation, and The Howard Hughes Corporation. The Motley Fool recommends Empire State Realty Trust and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.
