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Stock markets have been moving higher lately, making bargains harder to find. As a result, I think that Activision Blizzard and Berkshire Hathaway are two of the best shares to buy right now.
Higher prices make shares less attractive to investors like me. It means that I have to pay more for the same stocks that I was buying last week and last month.
That makes it harder to find attractive opportunities. But Activision Blizzard and Berkshire Hathaway are stocks that I’m happy buying for my portfolio today.
Let’s start with Berkshire Hathaway. Share prices have been going up across the board and Berkshire’s shares are 11% higher than they were a month ago.
That means the stock is less attractive than it was a month ago – I’d rather buy shares at $276 than at $306. But Berkshire is still one of my best shares to buy right now.
The company is facing a number of headwinds at the moment, most notably inflation and the possibility of recession. But I think that Berkshire’s strength will see the business do well over time.
Unlike other insurance companies, Berkshire invests its float in common stocks, rather than bonds. This allows it to earn a greater return than its competitors, which allows it to buy even more stocks.
Why don’t other insurance companies do this? Investing in stocks rather than bonds requires substantial cash to cover the possibility of underwriting losses. Berkshire has this, but other insurers don’t.
In other words, Berkshire’s biggest advantage is its balance sheet. This allows it to be conservative in its insurance writing and to invest at higher rates of return than its competitors.
Activision Blizzard is also one of my best shares to buy right now. In a turbulent market, I think that the stock offers a degree of predictability that is hard to find at the moment.
Since the company is the subject of a takeover bid, the investment thesis isn’t entirely about its earnings. Microsoft is attempting to buy Activision in its entirety at a price of $95 per share.
Today, the Activision share price is $80. This implies a gain of just over 18% if the deal goes through.
There’s a risk that the deal might not complete, though. If it doesn’t, I think that the stock is likely to fall to around $67, meaning a probable downside of around 16%.
I think that the deal is likely to go through, though. That means that I think the stock is attractive on a risk vs. reward basis.
It’s not just me that thinks this. Yesterday’s 13F filings revealed that Warren Buffett has been buying shares as well.
Shares to buy now
The stock market looks uncertain to me at the moment. Rising share prices are making stocks riskier, so I’m looking for opportunities that are as straightforward as possible.
That makes Activision Blizzard and Berkshire Hathaway two of the best shares for me to buy today. Activision’s future is relatively clear one way or another, and Berkshire has enduring strengths.
As such, with £500 to invest today, I’d look to buy both stocks.