Buffett's Blessing: Berkshire Hathaway's Big Stake in American Express

Berkshire Hathaway's massive portfolio of $354 billion includes a significant stake in American Express. The conglomerate owns nearly 152 million shares of the credit card giant, giving it a 22.5% stake in the company.

This position has worked out well for Berkshire Hathaway, with American Express generating a total return of 119% in the past five years.

Warren Buffett's stamp of approval is seen as a powerful signal to investors that American Express is a high-quality business. The Oracle of Omaha's philosophy focuses on identifying great businesses and letting them compound over long periods, which has resulted in Berkshire Hathaway's stock compounding at a 19.7% annualized pace.

American Express benefits from its strong brand, premium positioning targeting affluent customers, and network effect, where merchants can capture more sales as the number of card members grows.