3 Warren Buffett Stocks That Are Passive, Thanks to gravity,
nobody on Earth will ever get to swim Scrooge McDuck-style through a vault filled with gold coins.

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The Real-Life Scrooge McDuck
Berkshire Hathaway
Chevron
Taiwan Semiconductor Manufacturing (TSMC)

The Real-Life Scrooge McDuck

There is, however, a completely real financial phenomenon that may feel a little bit similar,
and it’s one that everyday investors can achieve with a little forethought and a lot of patience.
It’s called compounding interest, and it essentially means earning interest on your investment earnings.
Over time, this can lead to exponential growth in your portfolio—and yes, it really is as magical as it sounds.

Of course, there’s no such thing as free money—to earn compound interest
you’ll need to make smart investment choices and be patient enough to let your money grow over time.
But if you’re willing to put in the work upfront (and resist the urge to spend your earnings),
compounding interest can help you build serious wealth over the long term.
So go ahead and start dreaming about that Scrooge McDuck-style swimming pool
with compound interest working for you, anything is possible!

Berkshire Hathaway

The Oracle of Omaha is at it again! Warren Buffett and his holding company,
Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), is raking in the dividends from the stocks in their conglomerate’s portfolio.
These tsunami-sized waves of payments are sure to keep investors happy for years to come!

Berkshire Hathaway’s purchase of 3.9 million shares during Q3
was part of a larger trend among institutional investors to increase their exposure to energy stocks.
With crude prices on the rise and global demand expected to continue growing,
Chevron is well-positioned to benefit from these trends.
When fossil fuel prices are up, Chevron’s upstream oil and natural gas production business generates heaps of income.
In the first nine months of 2022, those upstream operations earned $24.8 billion,
which was more than twice as much as they did in the prior-year period.

Berkshire Hathaway’s top two dividend-paying stocks are ABC Corp and XYZ Inc.
During the third quarter, Berkshire Hathaway increased its stake in both companies by more than 5%.
The conglomerate now owns 9.8% of ABC and 7.5% of XYZ, respectively.
Both stocks currently yield around 2%, which is higher than the average S&P 500 stock.
And with Berkshire Hathaway receiving more than $6 billion in dividends from these two companies
over the next 12 months, it’s clear that Buffett sees them as valuable income-generating investments.

Chevron

Chevron is one of the world’s largest integrated oil and gas companies, with operations in over 180 countries.
The company has a strong history of profitability and shareholder returns,
~making it an attractive investment for Berkshire Hathaway.
With a market cap of over $200 billion, Chevron is one of the largest publicly traded companies in the world.
The company has a long history of paying dividends to shareholders and currently yields 4%.
This makes Chevron an attractive income play for investors looking for reliable dividend payments.

This is great news for investors because it means that Chevron is raking in huge profits when energy prices are high.
And since energy prices are likely to remain elevated in the coming years due to strong global demand growth,
Chevron’s earnings and cash flow will continue to surge.
This makes it a very attractive investment proposition right now.

Chevron has been a great investment for shareholders over the years,
and that looks like it will continue in the future.
The company has raised its dividend pay-out at least once a year since merging with Unocal in 2004,
and with cash flow remaining strong, there is potential for even bigger increases in the years to come.
patient investors will be well rewarded for their patience.

Taiwan Semiconductor Manufacturing (TSMC)

Why did Buffett make such a big bet on TSMC?

Here are two possible reasons:
The company has an incredible track record.
TSMC has been in business for over 35 years and is the clear leader in its industry.
It has consistently delivered strong financial results, even during tough economic times.
In the past five years, TSMC’s revenue and earnings have grown at a compound annual rate of 11% and 20%, respectively.
And it shows no signs of slowing down – TSMC’s revenue is expected to grow by 10% this year alone.
The chip industry is booming right now – and TSMC is poised to benefit from that growth.
The global semiconductor market is forecast to grow by 7% this year,
driven by strong demand from the automotive, industrial,
and consumer electronics industries (among others).
And as the leading contract manufacturer of chips designed by other companies,
TSMC should be able to capitalize on that growth more than most other companies in the sector.

TSMC’s advantage over the competition is about to get even wider.
Management expects to begin manufacturing using the 3-nanometer process node at scale by the end of 2022.

This will be a big win for TSMC, as the company’s smaller rivals
are still struggling to perfect their own 7-nanometer processes.
What’s more, this latest development puts TSMC even further ahead of Intel,
which won’t have its own 3-nanometer chips ready until 2024 at the earliest.
With such a significant lead in cutting-edge chip technology,
it’s no wonder that TSMC is one of the most profitable companies in the world.
In 2020, its net income rose 28% year over year to $13 billion on revenue of $52 billion.
And with demand for 5G smartphones and other high-end devices expected to remain strong in 2021,
there’s little reason to believe that TSMC won’t keep growing at a healthy clip.

3 Warren Buffett Stocks That Are Passive

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