Bests Investments for 2011

When analyzing investment options in 2011, who better to take advice from than Berkshire Hathaway CEO Warren Buffett.  Buffett is widely considered perhaps the most successful investor in the world.  He uses a value investing philosophy that is similar to those who buy businesses.  Listed below are Buffett's best stock investments for 2011. There are a variety of ways to invest money nowadays, with some options more lucrative than others.  In general, the riskier the investment, the larger the potential earnings.  The key for any investor is to minimize downside risk while maximizing upside. 

American Express

Buffett's company, Berkshire Hathaway, currently holds 151.6 million shares of stock in American Express.  Investors have followed and mimicked Buffett's investments for years, and he is particularly fond of American Express in 2011.  The current dividend yield of American Express is about 1.7%.  Buffett likes American Express because they have fewer delinquencies than ever and a high-end market compared to other companies.  

Bank of New York Mellon

The implied upside of the Bank of New York Mellon is more than 20%.  With just 1.99 million shares, this is one of Buffett's smaller investments.  It is also one if his newer investments, however, so there is time for growth.  Buffett likes the company’s business model, which has been credited with protecting it from the financial crisis which harmed many other banks in recent years.  Buffett has used a "forever" strategy on the Bank of New York Mellon, meaning he is in it for the long haul.  The majority of Buffett's investments use this strategy, as he will wait out long droughts without selling if he thinks an investment will ultimately be profitable.  

Gannett

Gannett's implied upside of over 32% is tremendous.  The company, which is the largest newspaper publisher in the nation, trades at six-times forward earnings.  Buffett does not have a lot of stake in the company, which is good since it has recently seen a decline in earnings and dividends.

General Electric

Buffett owns almost eight million shares of General Electric, but this number is said to be an understatement since Buffett performed a preferred financing on the company.  General Electric has an implied upside of 26.5% and is just beginning its turnaround with share buybacks coming soon.  Buffett also likes that the company can potentially cut back a large part of its financial operations.  Plus, General Electric is looking toward the future, focusing on health care and alternative energy sources, among other things.  The company is being picky with its acquisitions, making sure they are bound to help the company, and its shareholders.  Expect Buffett to invest more heavily in General Electric in 2011.

Procter and Gamble

This is an unusual investment for Buffett because Procter and Gamble does not normally see large changes in share price.  The company may fit well with Buffett's "forever" investment policy, however, and offers a 3.1% dividend that figures to grow more in the future.  It is considered a rather safe stock choice.  

Wells Fargo

With an incredible 336 million shares, Wells Fargo is one of Buffett's largest investments.  Plus, that number is growing.  Wells Fargo is not thought to have a ton of upside, but it does have steady long-term earning potential.