UNITED STATES - SEPTEMBER 22: Jamie Dimon, CEO of JPMorgan Chase, testifies during the Senate ... [+] Banking, Housing, and Urban Affairs Committee hearing titled Annual Oversight of the Nations Largest Banks, in Hart Building on Thursday, September 22, 2022. (Tom Williams/CQ-Roll Call, Inc via Getty Images)

J.P. Morgan CEO Jamie Dimon probably summed up this weeks energy-related events best when he noted that we need cheap, reliable, safe, secure energy, of which 80% comes from oil and gas during an interview on CNBC. It was a week in which other major players, notably including management at Vanguard, appeared to acknowledge that reality.

Lets take a look at some of the biggest energy-related events of the week just past:

The Iowa Caucuses and EPA Biofuels Mandates The EPA rolled out new, beefed-up biofuels mandates the week after the Democratic National Committee proposed a plan to end the long reign of the Iowa Caucuses as the first presidential nominating contest on its calendar.

Since the EPA began to allow the blending of corn-based ethanol in with gasoline in 1978, voters have been treated to the quadrennial spectacle of every candidate for the presidency in both parties flying to Iowa to pledge their undying support for the practice of removing millions of tons of corn from the food chain each year to make motor fuels. That political imperative only became magnified after congress and then-President George W. Bush decided to turn the allowance of biofuels blending into a mandate in 2005.

Moving Iowa out of its long-time catbirds seat on the nominating calendar wont necessarily mean the end or even diminution of these mandates, but it would free up the candidates to tell us what they really think about them instead of just knee-jerking to support a controversial policy whose benefits are questionable.

Russian Oil Price Cap Produces Short-term Results The price cap on Russian oil exports jointly sought by the EU, the G7 and Australia made its debut Monday. The cap of $60 per barrel was implemented at a time when prices were already on a downward trend, and prices continued the slide, with Brent crude dropping by more than 11% by the close of Fridays trading to stand just under $77 per barrel.

EU logo with Russian flag on screen with EU Commission press release on mobile. EU Russian oil Price ... [+] cap, EU agrees $60 price cap on Russian oil. In Brussels, Belgium on 4 December 2022. (Photo Illustration by Jonathan Raa/NurPhoto via Getty Images)

Given that the slide in prices coincided with several bullish factors, including Chinas rollback of many of its zero-Covid measures and a big drawdown in U.S. domestic crude stocks, the cap appears to have had its intended impact on global crude prices in the short term.

However, that could change once Russia announces a formal response. Markets rebounded slightly Friday when Russian President Vladimir Putin threatened a potential cut in supply, saying "As for our reaction, I have already said that we simply will not sell to those countries that make such decisions. We will think, maybe, even about a possible, if necessary ... reduction in production.

Should Putin decide to make that move, all bets will be off about the direction of oil prices in the longer-term.

Vanguard Pulls Out of ESG Coalition One of the worlds biggest ESG-focused investment firms, Vanguard, manager of more than $7 trillion in investor assets, announced Thursday its exit from an investor alliance (Net Zero Asset Managers, or NZAM) that seeks to force the de-carbonization of the western world, in part through the restriction of capital to fossil fuels-related projects.

In a report on the matter, Reuters attributes Vanguards exit to mounting pressure from Republican U.S. politicians over their use of environmental, social and governance (ESG) factors in picking and managing securities. If that is indeed the case, then this is another example of shifting political tides having consequences, despite the GOPs poor performance in the recently completed mid-term elections.

ESG-focused firms like Vanguard and BlackRock have come under increasing levels of pushback from Republican policymakers at the state level. In August, the Texas Comptrollers office cited both Vanguard and BlackRock as companies that discriminate against Texas oil and gas firms in their investment decisions. Ultimately, that citation could end the ability of either big investment houses to retain positions in the assets of various state-managed pension funds.

Other GOP-led states have taken similar actions. The Treasurer in one such state, North Carolina, went so far on Friday as to call on BlackRock CEO Larry Fink to resign or be removed due to his anti-fossil fuels advocacy.

NEW YORK, NEW YORK - NOVEMBER 30: Andrew Ross Sorkin speaks with BlackRock CEO Larry Fink during the ... [+] New York Times DealBook Summit in the Appel Room at the Jazz At Lincoln Center on November 30, 2022 in New York City. The New York Times held its first in-person DealBook Summit since the start of the coronavirus (COVID-19) pandemic with speakers from the worlds of financial services, technology, consumer goods, private investment, venture capital, banking, media, public relations, policy, government, and academia. (Photo by Michael M. Santiago/Getty Images)

Unfortunately, Larry Finks pursuit of a political agenda has gotten in the way of BlackRocks same fiduciary duty. A focus on ESG is not a focus on returns and potentially could force us to violate our own fiduciary duty, said state Treasure Dale Folwell in a letter sent to BlackRocks board of directors.

The ESG movements capital denial efforts have contributed to the creation of a large and growing deficit since 2015 in adequate investments in finding and development of new reserves of oil and natural gas. Both Rystad Energy and Wood-Mackenzie issued reports in 2021 that estimated the deficit at between $400-$500 billion at that time.

The predictable outcome of that investment deficit has been rising costs for energy, regional shortages of both oil and natural gas supplies and shortages of the thousands of products made from petroleum, like fertilizers.

Exxon, Chevron Announce Strategic Plans Meanwhile, Big Oil giants ExxonMobil and Chevron rolled out new strategic plans Thursday that contemplate major increases in capital spending and share buyback programs.

I detailed ExxonMobils plans in a Friday story linked here. Chevron also plans significant additional investments in new oil and gas projects, planning for a $17 billion organic capital budget, up by more than 25% over the 2022 budget. The budgets for both companies include significant increases in capital for oil and gas projects and also for their respective low carbon business segments.

Jamie Dimon Hits the Nail on the Head All of the above leads to the statement made Tuesday by J.P. Morgan CEO Jamie Dimon on CNBCs Squawkbox program. If the lesson was learned from Ukraine, we need cheap, reliable, safe, secure energy, of which 80% comes from oil and gas, Dimon said. And that numbers going to be very high for 10 or 20 years.

That comment is consistent with the statement Dimon made during a September congressional hearing in which he was asked if he would pledge that his firm would stop investing in oil and gas projects. Absolutely not and that would be the road to hell for America, he said.

The world cannot hope to have reliable, safe, secure energy Dimon speaks to without the ability to invest adequate capital in major new projects. ExxonMobil and Chevron understand that, and apparently the management team at Vanguard is waking up to that reality as well.

Original post:
Dimon Highlights Need For More Oil And Gas Investment As Vanguard Bails On ESG Group - Forbes

BlackRocks top minds seem worried. Investment strategists at the worlds largest asset manager warned of a coming recession, stubborn inflation, and a new era that wont be so kind to investors in their 2023 Global Outlook released this week.

The Great Moderation, the four-decade period of largely stable activity and inflation, is behind us, vice chairman Philipp Hildebrand and a team of top executives wrote. The new regime of greater macro and market volatility is playing out. A recession is foretold.

Hildebrand and his team argue that the Great Moderationa period of low inflation and steady economic growthallowed stocks and bonds to flourish in a way that wont be possible moving forward.

For investors, this new economic era will require a fresh, flexible strategy that involves selective stock picking and more active portfolio management.

We dont see the sustained bull markets of the past. Thats why a new investment playbook is needed, they wrote. What worked in the past wont work now.

Three major regime drivers are set to keep inflation elevated above central banks targets, subdue economic growth, and make it more difficult for investors to turn a profit for years to come, according to BlackRock.

First, aging populations will shrink workforces and force governments to spend more to care for the elderly, causing worker shortages and reduced production.

Second, tensions between global superpowers signal that weve entered into a new world order, where globalized supply chains that once helped reduce the price of goods may be broken.

This is, in our view, the most fraught global environment since World War II, Hildebrand and his team wrote. We see geopolitical cooperation and globalization evolving into a fragmented world with competing blocs. That comes at the cost of economic efficiency.

Finally, a more rapid transition to clean energy will ultimately be inflationary unless a new stream of investment flows into carbon-neutral solutions.

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If high-carbon production falls faster than low-carbon alternatives are phased in, shortages could result, driving up prices and disrupting economic activity, they wrote. The faster the transition, the more out of sync the handoff could bemeaning more volatile inflation and economic activity.

BlackRock also broke down three themes to help prepare investors for the new normal in their 2023 forecast.

First, the asset managers experts argued that factoring in the damage done by central banks interest rate hikes and the risk of recession when evaluating stocks will be critical next year.

Equity valuations dont yet reflect the damage ahead, in our view, they wrote. We find that earnings expectations dont yet price in even a mild recession.

BlackRock doesnt like developed-market stocks, at least in the near term, because Hildebrand and his team believe the Fed wont save markets by slashing interest rates when a recession hits as they have in the past. Its the end of the so-called Fed put.

Central bankers wont ride to the rescue when growth slows in this new regime, contrary to what investors have come to expect, they argued. Thats why the old playbook of simply buying the dip doesnt apply in this regime.

Hildebrand and his team even went so far as to argue that central bankers are deliberately causing recessions by aggressively raising interest rates to fight inflation.

The new playbook calls for a continuous reassessment of how much of the economic damage being generated by central banks is in the price, they wrote. That damage is building.

After years of underperformance versus equities, it may be time to look to the bond market for steady income as a recession looms.

Fixed income finally offers income after yields surged globally, Hildebrand and his team wrote. This has boosted the allure of bonds after investors were starved for yield for years.

They recommended investors look to investment-grade credit and short-term government bonds, but warned to avoid long-term government bonds owing to rising debt levels and higher inflation.

In the old playbook, long-term government bonds would be part of the package as they historically have shielded portfolios from recession. Not this time, we think, they wrote.

Year-over-year inflation, as measured by the consumer price index (CPI), likely peaked in June at 9.1%. And some CEOs and money managers argue that its set to come down fast.

But BlackRock has a different point of view.

Even with a recession coming, we think we are going to be living with inflation, Hildebrand and his team wrote. We do see inflation cooling as spending patterns normalize and energy prices relentbut we see it persisting above policy targets in coming years.

In this higher-inflation environment, they recommend inflation-protected bonds and avoiding stocksat least in the near term.

More volatile and persistent inflation is not yet priced in by markets, we think, they warned.

This story was originally featured on Fortune.com

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BlackRock says throw out your old investment playbook, were headed for a new regime of greater macro and market volatility - Yahoo Finance

In investing, sometimes simpler is better. Investing doesn't have to be complicated, nor should it be. It doesn't take hours of research or technical analysis to put together a solid portfolio; oftentimes, a handful of well-diversified funds will do the trick. Here are three investments I would lean on if I had to invest $20,000 from scratch today.

TheS&P 500is an index that tracks the largest 500 public U.S. companies bymarket cap. It's the most followed index and is often used to gauge how the overall stock market is performing. The S&P 500 is a good investment because it gives investors almost instant diversification, access to blue chip stocks, and less risk than investing in an individual company. It's a three-for-one you can't go wrong with.

I would put most of the $20,000 toward the S&P 500, investing $12,000 in the Vanguard S&P 500 ETF (VOO -0.73%). The Vanguard S&P 500 ETF is one of the cheapest ETFs available (0.03% expense ratio) and has returned over 13.5% since its inception in September 2010. Past results don't guarantee future performance, but you can be sure its returns will closely track the overall market over the long term.

There's a reason Warren Buffett is a huge proponent of the S&P 500: It's effective. He even told CNBC that buying a low-cost S&P 500 fund "makes the most sense practically all of the time." Countless people have become millionaires by simply investing in the S&P 500 over time. When in doubt, let it lead the way.

High-risk, high-reward applies to different types of investments (stocks vs. bonds, for example), but it also applies within stocks. Larger companies are less prone to volatility and market downturns because they tend to have more resources at their disposal. Smaller companies are generally riskier and more susceptible to broader economic conditions, but their size means there's more room for growth -- and returns for investors.

The Russell 2000 tracks the smallest 2000 companies in the Russell 3000 and is widely considered the primary benchmark for small-cap stocks. What the S&P 500 is for large-cap stocks, the Russell 2000 is for small-cap stocks. It's diversified and covers every sector imaginable. If I were starting from scratch, I would invest $3,000 into the Vanguard Russell 2000 ETF (VTWO -1.23%) because of its comparably low expense ratio (0.10%) than other Russell 2000 ETFs.

Like all major indexes, it's been a rough 2022 for the Russell 2000, but that was to be expected. Small-cap stocks usually take more of a hit during bear markets, but they often outperform large-cap stocks in the early stages of a bull market. You don't want the bulk of your portfolio in small-cap stocks, but you should have some exposure.

One of the key pillars of a good investment portfolio is diversification. Part of having diversification includes investing in companies with different market caps, different industries, different growth potential, and different locations globally. If you only invest in U.S. companies, you're limiting yourself and missing out on quality investments that could provide good returns.

International markets are generally divided into two categories: developed and emerging. Developed markets typically have more advanced economies, better infrastructure, established industries, and higher living standards. Conversely, emerging markets typically have lower incomes, younger capital markets, and less-stable economies.

Researching individual U.S. companies can already be time-consuming for most people, and adding in the international element (local economy, political climate, etc.) doesn't make it any easier. That's why investors should consider investing in a total international ETF, which can double the diversification by exposing them to developed and emerging markets.

Take theVanguard Total International Stock ETF(VXUS -0.15%), for example, which contains 7,985 companies spanning the following regions:

This is where I'd invest the remaining $5,000.

Stefon Walters has positions in Vanguard Index Funds-Vanguard S&p 500 ETF and Vanguard Star Funds-Vanguard Total International Stock ETF. The Motley Fool has positions in and recommends Vanguard Index Funds-Vanguard S&p 500 ETF and Vanguard Star Funds-Vanguard Total International Stock ETF. The Motley Fool has a disclosure policy.

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How I'd Invest $20,000 Today If I Had to Start From Scratch - The Motley Fool

It's important to prioritize the investment merits over any potential tax benefits when making portfolio adjustments, Fidelity's Munro said.

For many Canadians, taxes might not be top of mind until March or April when the income tax filing deadline approaches.

But there are a number of investment tax credits and breaks that need to be executed before the end of the year in order to take advantage of them when the April 30tax-filing deadline rolls around.

"An ounce of prevention is worth a pound of cure. Because in April, there's no opportunity to take advantage of these. It's too late," Michelle Munro, director of tax and retirement research at Fidelity Investments, told Yahoo Finance Canada in a phone interview.

"I know December is already a busy time, it's the end of year, holidays, what have you, but thinking about it can potentially save you thousands in taxes come April, depending on your situation."

Here are Munro's top three tax tips to take advantage over the next few weeks.

Tax-loss selling is one of the best ways investors can save on their tax bill, Munro says.

After a volatile year in the markets, it's time to balance out gains and losses to maximize tax efficiency.

"Think about how that fits into the whole picture and think about your portfolio, as well. Do you want to be hanging on to this investment for the long term? And if it doesn't really fit into your portfolio, think about how you can take advantage of this loss," she said.

She emphasized, however, that the investment merits of selling any holdings should take priority over any potential tax benefits.

Tax-loss selling is when an investor sells a security at a loss to offset capital gains and reduce the taxes owed. The trade must be settled before the end of the calendar year for it to count towards the 2022 tax year, so investors need to execute any such trades by Dec. 28 where there is a trade plus two-day settlement period.

Once losses have been applied to the current tax year, any excess losses can be carried back for up to three taxation years or carried forward indefinitely to offset future capital gains.

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Munro says it's relatively straight-forward to carry back losses for those that use electronic tax filing systems.

The one crucial aspect about tax-loss selling to remember is the superficial rule. It dictates that the investor must not have purchased the same or identical security within 30 days before or after triggering the loss. This rule applies across all of the investor's accounts, any corporations they control, or their spouse, otherwise Canada Revenue Agency will deny the loss.

She notes, on the contrary, if the investor is looking to re-balance and trigger a capital gain, it might be worth selling the security in 2023 to delay the tax bill to 2024.

It's the season of giving and any investor considering donating to a charity might want to donate securities in-kind rather than cash, Munro says.

To reap any tax benefits for security in-kind donations, they need to be made to a registered charity (the CRA has a list of eligible organizations on its website), and a donation receipt needs to be issued.

The tax benefits of donating securities in-kind are a "double bonus," she says.

"The gain associated with those donated units is eliminated on your tax return. And the individual gets a donation receipt for the fair market value of those donated securities."

On the first $200 worth of donations, there's a federal tax credit of 15 per cent. Any donations above that threshold are subject to a tax credit of 29 per cent, or 33 per cent in certain situations.

Despite the word "savings" being in the name, Canadians should maximize the use of their Tax-Free Savings Accounts as investment accounts, Munro says.

"Longevity is increasing, which means that the time in retirement is also increasing. And having a long-term investment focus for your TFSA. Think of your TFSA as a complement to your RRSP," she said.

Contributions to a TFSA are not tax-deductible unlike RRSP contributions, but any capital gains and investment income earned are not subject to tax when withdrawn.

One extra tip to consider: If an investor thinks they will need to take money out of their TFSA next year, it's better to withdraw the money in Dec. 2022 so the contribution room will be added back to their limit come Jan. 1, 2023, Munro says.

Otherwise, any contribution room from withdrawals in 2023 won't be added back until 2024.

Michelle Zadikian is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @m_zadikian.

Download the Yahoo Finance app, available for Apple and Android.

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It's not too late to take advantage of these year-end investment tax tips - Yahoo Finance

Investors should always remain aware of their risk tolerance, which becomes increasingly important as your position sizes grow and the stakes become larger. You might invest $500 differently than, say, $50,000.

But you don't have to completely ignore the investment strategy that got you to that point; you can invest to grow your wealth while minimizing the risk of severe volatility. Finding the highest quality stocks should be your goal, and here are some great stocks to consider, especially for those with large position sizes.

Technology conglomerate Alphabet (GOOG -0.94%) (GOOGL -0.94%) dominates the internet; its Google search engine conducts 92% of the world's internet searches, a fantastic stat because it shows that no company on earth has been able to set up a notable competitor in any market. It's about as close to a monopoly as you can get. Additionally, its video platform YouTube has become one of the world's largest media sources; it's the world's second-most-visited website, just behind Google.

Alphabet generates tons of profitable revenue by selling ads to its internet audience; the company's done $282 billion in revenue over the past year, and $62 billion of that (22%) becomes free cash flow, profits that Alphabet can add to its financial war chest. The company holds $116 billion in cash against just $12 billion in debt. Finding such a large and dominant business with robust financials is hard.

GOOG Revenue (TTM) data by YCharts.

Investors can feel confident putting their money into such a steady company. Plus, it's not like Alphabet can't keep growing; analysts believe the company's earnings-per-share (EPS) will increase by an average of 11% annually over the next three to five years. Shares are down 37% from their high in this bear market, its largest drawdown ever. That seems like a great buying opportunity for one of Wall Street's most fundamentally solid stocks.

Investing $50,000 into a dividend stock can produce some solid dividend streams, and telecom giant AT&T (T -0.16%) is an excellent option for maximizing your passive income. AT&T is the largest wireless carrier in the United States, with approximately 45% market share. The company's financials have improved dramatically since it shed its entertainment business to focus solely on telecom. The company's dividend yields 5.8% at the current share price.

T Payout Ratio data by YCharts.

AT&T is a former Dividend Aristocrat; it cut its dividend as part of its restructuring to free up more cash to pay down debt. This has provided a lot of relief to AT&T's financials, which should ensure a more reliable dividend moving forward. The current dividend payout ratio is more manageable at 58% of earnings,and AT&T's dividend should only become safer as the balance sheet sheds debt. AT&T's telecom business should also remain reliable in a recession. Most consumers pay their phone bills like a utility because of how much a smartphone does nowadays (social media, bills, banking, etc.).

AT&T's wireless business is picking up new customers at a healthy rate in 2022, which could be another clue that AT&T's business is trending upward. Analysts believe the company's EPS will grow by an average of 3% annually over the next three to five years. That won't impress your friends, but you don't need a lot of growth for AT&T to keep raising its dividend.

Global semiconductor company Texas Instruments (TXN -1.19%) makes analog chips that go into countless electronic devices. It's the world's leading analog chip supplier, with approximately 19% of the market in 2021. That translates to revenue totaling just over $20 billion over the past four quarters. Additionally, Texas Instruments is very profitable; about $0.29 of every revenue dollar ends up as free cash flow.

The company's strong margins have made Texas Instruments an excellent dividend stock; investors can get a 2.8% dividend yield today, and management has increased the payout for 19 consecutive years. The dividend payout ratio is 47%, which leaves plenty of room for growth for this (potential) eventual Dividend Aristocrat.

TXN Revenue (TTM) data by YCharts.

Semiconductors are the building blocks of technology, so chips should remain in demand as new technology like autonomous vehicles, the Internet of Things (IoT), and automation continue growing over the coming years. These opportunities should translate to growth for Texas Instruments; analysts are looking for EPS growth averaging 9% annually over the next three to five years. The stock has held up well in 2022, down just 14% from its high. But at a price-to-earnings ratio (P/E) of 18, the stock is still cheap compared to its median P/E over the last decade of 21.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Texas Instruments. The Motley Fool has a disclosure policy.

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The Best Stocks to Invest $50,000 in Right Now - The Motley Fool

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Temasek's outsized investment in Tindle spoils appetite for the chicken substitute - The Ken

President Joe Biden is joining the founder of Taiwan Semiconductor Manufacturing Co. on Tuesday to announce the opening of the company's second chip plant in Arizona, raising its investment in the state from $12 billion to $40 billion.

The company will also announce it will be producing more technically advanced chips than originally proposed. The investment by TSMC is one of the largest foreign investments in U.S. history, and the biggest in the state of Arizona.

Semiconductor chips are used in everything from computers and smartphones to cars, microwaves and health-care devices. The Covid-19 pandemic shined a bright light on U.S. dependence on Chinese manufacturers as lockdowns led to a global shortage of the high-tech chips.

US President Joe Biden arrives to speak on rebuilding US manufacturing through the CHIPS and Science Act at the groundbreaking of the new Intel semiconductor manufacturing facility near New Albany, Ohio, on September 9, 2022.

Saul Loeb | AFP | Getty Images

Biden signed the CHIPS and Science Act into law in early August, allocating billions to lure manufacturers to produce the widely used chips domestically. The lawincludes $52.7 billion in loans, grants and other incentives as well as billions more in tax credits to encourage investment in U.S. semiconductor manufacturing.

Once the TSMC plants open, they, along with existing investments, will produce enough advanced chips to meet the U.S. annual demand, 600,000 wafers per year, according to Ronnie Chatterji, National Economic Council acting deputy director for industrial policy who oversees CHIPS implementation.

"It's the foundation of our personal electronics, and also the future of quantum computing and AI," Chatterji said. "At scale, these two [factories] could meet the entire U.S. demand for U.S. chips when they're completed. That's the definition of supply chain resilience. We won't have to rely on anyone else to make the chips we need."

"The passage of the CHIPS and Science Act was absolutely critical in providing the long term certainty for companies like TSMC to expand their footprint and expand their commitment to the United States," said Brian Deese, director of the National Economic Council.

The goal of the legislation was to spur private investment in chip manufacturing. CEOs from companies who will benefit from U.S. chip production, like Apple CEO Tim Cook, Micron CEO Sanjay Mehrotra and Nvidia CEO Jensen Huang, will also be in attendance.

Read more of CNBC's politics coverage:

"Whether it's in electric vehicles or consumer electronics, CEOs of major companies are making decisions about their plans 18 to 24 months forward," Deese said. "The build out in the United States gives them more confidence to operate as well."

Biden is visiting the first plant in Phoenix which is expected to begin producing chips by 2024. It was initially slated to produce 5 nanometer chips, but now will create 4 nanometer chips. The second plant will open in 2026 and produce 3 nanometer chips, the most cutting-edge chips currently available.

The opening of the plants will further help boost Arizona's economy which was hard hit by the pandemic. Phoenix had an unemployment rate of 6.5% in 2020 when more than 9,000 of the city's residents filed for bankruptcy. Phoenix's unemployment rate has since dropped to 3.2%. The state's economy grew by 6.3% in 2021, the most in 16 years.

Clarification: This story was updated to reflect that the White House clarified that once open, the two factories, in addition to other investments, will produce enough chips to meet current annual U.S. demand.

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TSMC to up Arizona investment to $40 billion with second semiconductor chip plant - CNBC

If you've ever wondered why Wall Street professionals and everyday investors pay such close attention to what Berkshire Hathaway (BRK.A 0.05%) (BRK.B 0.13%) CEO Warren Buffett has been buying or selling, just take a closer look at his track record. Since taking the reins in 1965, the Oracle of Omaha has led his company's Class A shares (BRK.A) to an aggregate return of 3,641,613% (through Dec. 31, 2021). That's 120 times greater than the broad-based S&P 500, including dividends, over the same period.

Warren Buffett's success has been driven by a mammoth list of factors, including his long-term mindset and attraction to dividend stocks and cyclical businesses. But perhaps tops on the list of reasons Berkshire Hathaway has outperformed is Buffett's shunning of portfolio diversification. In the Oracle of Omaha's eyes, diversification is only something investors should rely on if they don't know what they're doing.

Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.

Warren Buffett most definitely knows what he's doing -- and he has 59% of Berkshire Hathaway's $345 billion investment portfolio tied up in just three stocks.

Including the assets held by Warren Buffett's secret portfolio, New England Asset Management, Berkshire's position in tech stock Apple (AAPL -0.34%) accounted for more than $135 billion of invested assets as of the end of last week. That's close to $0.40 of every $1 invested by Buffett's company tied up in Apple.

Aside from being the largest publicly traded company in the U.S., Apple offers Buffett three key selling points. First, there's the value of its brand and the customer loyalty it brings to the table. According to the Kantar BrandZ global survey released in June, Apple reclaimed the top spot as the world's most-valuable brand. The survey cited a multitude of competitive advantages, innovations, and products that resonate with consumers. For instance, the iPhone has gobbled up a little over half of all smartphone market share in the United States.

The second reason Apple makes for such a rock-solid investment is its innovation. In addition to developing smartphones, laptops, tablets, watches, and other accessories that consumers absolutely flock to, the company is in the process of shifting its operating model to focus on subscription services. Shifting to a subscription-driven platform should help minimize the revenue peaks and troughs often associated with physical product replacement cycles. Additionally, subscriptions offer higher margins and tend to improve customer loyalty.

The third reason Warren Buffett thinks fondly of Apple is its capital-return program. Although its 0.6% yield might not sound like much, Apple's nominal annual payout of $14.64 billion is one of the largest in the world.

Furthermore, since launching an aggressive share-repurchase program in 2013, the company has bought back $554 billion worth of its own stock. For context of just how massive this buyback program has been, only five S&P 500 companies not named Apple have a market cap of more than $554 billion -- and Berkshire Hathaway happens to be one of them.

Despite not being immune to cyclical slowdowns, Apple remains well positioned to thrive over the long run.

The second stock Warren Buffett and his investment team have absolutely piled into is Bank of America (BAC -0.18%). BofA, as it's also called, accounted for close to 11% of invested assets as of last week. Keep in mind this figure also includes positions held by specialty investment firm New England Asset Management, which Berkshire Hathaway owns.

There's a very good reason financials are, arguably, Buffett's favorite sector: They're cyclical. As a long-term investor, the Oracle of Omaha is well aware that periods of economic expansion last considerably longer than downturns and recessions. Even though bank stocks like BofA do take their lumps when recessions arise, they benefit far more from disproportionately long expansions. In other words, patience pays off big time when investing in bank stocks.

This is a particularly interesting time to have $37.3 billion tied up in Bank of America. At no point in history has the Federal Reserve aggressively hiked interest rates into a plunging stock market. Although higher interest rates threaten to cool lending and slow economic activity, they should be a boon for banks that have outstanding variable-rate loans. Bank of America's net interest income jumped $2.7 billion during the third quarter from the prior-year period, and the company has estimated that a 100 basis-point parallel shift in the interest rate yield curve would bring in $4.2 billion in addition to net interest income over the next 12 months.

Bank of America's digitization push is paying off, too. The company closed out September with 43 million active digital users -- that's up 5 million from the comparable quarter in 2019 -- and saw 48% of total sales completed online or via mobile app. On top of added convenience, digital transactions cost banks just a fraction of what in-person and phone-based interactions run. As more users shift to online banking, BofA should be able to consolidate some of its branches and improve its operating efficiency.

Lastly, bank stocks have a pretty rich history of rewarding their shareholders during the good times. Including dividends and share buybacks, it's not uncommon for Bank of America to approve capital-return programs topping $20 billion per year.

Image source: Getty Images.

The third stock that Warren Buffett made a significant portion of Berkshire Hathaway's investment portfolio is energy stock Chevron (CVX -3.19%). As of last week, Chevron accounted for close to 9% of invested assets, including the shares also held by New England Asset Management.

What's intriguing about this position is that, prior to 2022, energy stocks didn't comprise a greater than 8.9% weighting in Berkshire's portfolio this century. Now, Chevron alone comprises an 8.9% stake, with Occidental Petroleumcontributing to make energy Buffett's third-largest sector by invested assets.

With roughly an eighth of his company's invested assets tied up in energy stocks, Buffett appears to be sending a very clear message that oil and natural gas prices will remain above average for some time. Even though Chevron is an integrated operator, it generates its best margins from drilling. Due to pandemic-related underinvestment from energy companies, as well as Russia's invasion of Ukraine, a challenged energy supply chain favors higher energy commodity spot prices.

Chevron is also a considerably safer bet than most oil and gas stocks. As noted, it's an integrated operator, which means that in addition to drilling and exploration, it operates midstream pipelines and downstream assets (refineries and chemical plants). Midstream providers utilize long-term, fixed-fee and volume-based contracts with drillers to produce predictable cash flow. Meanwhile, refineries and chemical plants benefit from higher demand and lower input costs when the price for crude oil falls. In short, Chevron is hedged for whatever the energy market throws its way.

It's an oil stock with a relatively pristine balance sheet, too. As of the end of the third quarter, Chevron had $8.2 billion in net debt, equating to a debt ratio of 13%. That's below virtually all major oil and gas stocks, and it affords Chevron superior financial flexibility.

Historically high energy commodity prices have also allowed Chevron to increase its dividend and enact a share-repurchase program for up to $15 billion worth of its common stock in 2022. A healthy capital-return program and industry-leading balance sheet is a recipe for a company to find itself in Buffett's good graces.

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59% of Warren Buffett's Portfolio Is Invested in Just 3 Stocks - The Motley Fool

The best wireless earbuds are designed to deliver stellar audio, battery life, and special features (e.g., active noise cancellation, spatial audio). Sports wireless earbuds are no exception.

Im not talking about the clunky, limited-feature models of the past. The sub-category has evolved, welcoming innovative sporty creations that boast the latest wireless technologies and many functional perks.

Elite brands like Beats, Bose, Jabra, JBL, and Sennheiser have all released exceptional wireless sports earbuds. Even newcomers like JLab continue to generate interest from bargain shoppers seeking inexpensive running earbuds with quality performance.

This style of earbud might be a hard pass for some, especially when category leaders like the AirPods Pro 2 and Sony WF-1000XM4 are worth the splurge. However, there are legit reasons as to why sports earbuds stand out as the better true wireless investment.

Allow me to enlighten you.

How often have your AirPods broken or fallen down a sewer grate? Whether once or numerous times, youve helped Apple generate an estimated half-a-billion dollars in AirPods replacements. Congrats. Its not like Apple doesnt sell sturdier buds. Check out the Beats Fit Pro, a model we believe is better than the AirPods Pro.

Go into any Apple store and wrap your fingers around the AirPods Pro and Beats Fit Pro. Both are built entirely from plastic, but the latter is far more durable and provides a better fit via installed wings.

The standard IPX rating for most wireless earbuds is IPX4, which is fine for sweat and water resistance. Sports buds like the Jaybird Vista 2 crush the competition with a military-spec rating (IP68) for protection against dust, water, sweat, and drops. Even its wireless charging case comes IP54-rated to stave off heavy splashes of water.

There are plenty of other buds with similar IPX ratings that keep them safe from dust and moisture damage. Very few luxury models offer this.

Engineers tweak sports earbuds to emphasize bass and treble, two sonic elements favored by avid exercisers, as well as casual listeners that value punchy sound over clarity and detail. You can hear it on models like the Beats Fit Pro and Jaybird Vista 2, which are well engineered and surpass any AirPods version in terms of audio quality.

Several sports buds also carry audio features similar to their non-sporty rivals. On the list: a customizable equalizer to adjust frequencies, music presets, and hi-res/lossless audio codecs. Sennheiser gave their Sport True Wireless model aptX support for lower latency and improved sound over Wi-Fi. The Sony WF-SP800N grants access to Sonys 360 Reality Audio platform to hear music and movies with theater-like sound, along with proprietary LDAC technology that streams music at a faster bitrate over hi-fi streaming services (e.g., Tidal, Qobuz).

The industry standard for battery life on wireless earbuds is between 5 to 6 hours. Most sports earbuds are rated higher, somewhere between 6 to 12 hours, depending how you use them.

For comparison, the AirPods Pro 2 gets you 5 to 6 hours, whereas the Beats Fit Pro (6 to 7 hours) and Powerbeats Pro (9 hours) last much longer. Swanky sports buds like the Master & Dynamic MW08 Sport can extend playtime up to 12 hours. Then come bargain gems like the JLab Epic Air Sport ANC (2nd Gen) that leads the category with up to 15 hours of listening time.

Charging cases for sport earbuds also hold more portable power: between 28 to 70 hours. Quick charging is standard and were seeing newer releases come with wireless charging, which brands have mainly reserved for their flagship buds, but are rolling out onto their mid-range and fitness-centric offerings.

There was a time when select features were reserved for flagship models. Im talking everything from 3D sound to Bluetooth multipoint (pair to two devices at once) to ear tip fit tests to personalized listening modes. Not anymore.

Take the AirPods Pro for instance. When announced, it introduced so many new features that made it the Apple wireless earbuds to own. Then the Beats Fit Pro came along, copied the AirPods Pros entire spec sheet, and launched at $50 less. More importantly, the Fit Pro came with what many presumed were AirPods exclusives such as Find My support for tracking lost buds and spatial audio to enjoy cinematic sound with Dolby Atmos-compatible content.

Jabra is another brand that has passed high-end features like MySound and Personalized ANC two settings that automatically adjust sound and noise cancellation to the users hearing onto their latest sporty entries: the Elite 4 Active and Elite 7 Active.

The AirPods Pro 2 updated Apples 3D audio format and renamed it Personalized Spatial Audio. Guess which model also supports it? The Beats Fit Pro.

However, some audio brands are making strides and figuring out unique ways to have sports buds monitor activity and health stats. Underrated releases like the Amazfit Powerbuds Pro (opens in new tab) can monitor heart rate and offer advice on how to fix your posture to prevent cervical disease.

I would never recommend replacing your Apple Watch or Fitbit with sports earbuds. The technologies on these wrist-worn devices are too advanced and deliver more accurate results.

Classics like the Jabra Elite 65t (opens in new tab) can track your walking and running stats; this product has been on the market for 4 years. There are a couple of other sports buds that can capture and sync data (cadence, steps taken) to third-party fitness apps on your smartphone device as well.

At least these models can serve as a measuring stick for health progress when your fitness watch runs out of power.

Most sports earbuds match the performance of expensive wireless earbuds. Theyre also built to last longer, surviving the daily abuse youll put them through on commutes or at the gym.

Below are links to three of our favorites:

There will be some compromises, most likely in comfort and style, though neither should deter you from making sports earbuds your go-to audio device.

Today's best Jabra Elite 4 Active deals

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Sports earbuds are the best true wireless investment you can make here's why - Laptop Mag

At first glance, Intel (INTC -0.70%) might seem like a reliable long-term investment. It's the world's largest producer of x86 CPUs for PCs and servers, it's firmly profitable, and it pays consistent dividends. But if you had invested $3,000 in Intel on the first trading day of 2015, your investment would only be worth about $2,300 today.

If you had invested $3,000 into Intel's rival Advanced Micro Devices instead, your investment would be worth roughly $78,000. A $3,000 investment in Taiwan Semiconductor Manufacturing (TSM -0.14%), Intel's top competitor in the foundry market, would also have blossomed into nearly $11,000. So why did Intel underperform its industry peers by such a wide margin?

Image source: Intel.

Intel is an integrated device manufacturer (IDM) that manufactures most of its own chips at its first-party foundries. By comparison, "fabless" foundries like AMD outsource their production to third-party contract chipmakers like TSMC. For decades, Intel manufactured the world's smallest and densest chips by adhering to Moore's Law, a prediction from its co-founder Gordon Moore that the number of transistors within the same area of silicon could double every two years.

Intel formalized that two-year cadence as its "tick-tock" model in 2007. With every "tick," it shrank its chips to a smaller node (which is currently measured in nanometers). With each "tock" the following year, it upgraded the chip's microarchitecture.

But starting in 2012, the gaps between Intel's tick and tock launches became longer as it struggled to manufacture smaller chips. In 2014 TSMC started to install ASML's extreme ultraviolet (EUV) systems -- which are used to etch circuit patterns onto silicon wafers -- to produce more advanced chips for Apple and other chipmakers.

Instead of following TSMC's example, Intel didn't aggressively expand its EUV fleet even thought it had been one of ASML's top investors back in 2012. As a result, TSMC eventually overtook Intel inthe "process race" to manufacture smaller, denser, and more power efficient chips in 2020. That victory also enabled TSMC's client AMD to launch more advanced chips than Intel. It also maintained a more stable supply of chips as Intel grappled with product delays and chip shortages.

Faced with all those challenges, Intel's share of the PC market plunged from 82.2% to 63.3% between the fourth quarters of 2016 and 2022, according to PassMark Software, as AMD's market share nearly doubled from 17.8% to 34.6%.

Intel's other glaring failure was its loss of the mobile CPU market to Arm-based chipmakers like Qualcomm and MediaTek. Instead of licensing the power-efficient Arm architecture, Intel stuck with the same power-hungry x86 architecture it used for its PC and server chips.

Intel was so confident in its x86 architecture that it actually sold its own Arm-based chipmaker, Xscale, to Marvellin 2006. It also refused to produce mobile CPUs for Apple'sfirst iPhone, which launched in 2007, because it believed Apple could never sell enough iPhones to justify its own development and production costs.

Intel introduced its own Atom chips for mobile devices in 2008, but they were less power efficient than Arm chips and suffered some compatibility issues with apps developed for Arm devices. In 2014, Intel started to aggressively subsidize its Atom shipments with billions of dollars in "contra revenues," which included big rebates for OEMs, but it eventually abandoned that futile and loss-leading effort in 2019. As a result, Intel largely missed the big shift from PCs toward mobile devices.

As Intel grappled with all those challenges, it kept shifting gears under three different CEOs within just four years. In 2018, Brian Krzanich -- who was widely blamed for Intel's loss of its process lead to TSMC, its costly mobile mistakes, and the "diworsification" of its business -- resigned due to an inappropriate relationship with an employee.

Krzanich's successor, his former CFO Bob Swan, was ousted in early 2021 after being criticized for prioritizing cost-cutting measures, buybacks, and divestments over reclaiming the process lead from TSMC. Swan also briefly considered going fabless and outsourcing Intel's production to TSMC. He was replaced by Pat Gelsinger, who steered Intel in the opposite direction and doubled down on upgrading the company's plants, buying new EUV systems from ASML, and catching up to TSMC in the process race by 2024 or 2025. It's trying to spin all those plates as the growth of the PC market stalls outin a post-pandemic market.

Therefore, Gelsinger needs Intel's investors to brace for slower revenue growth and rising expenses for the foreseeable future as it tries to rectify its previous mistakes. That's why analysts expect Intel's revenue and earnings to decline in both 2022 and 2023 -- and why its stock still can't be considered a bargain at 16 times forward earnings.

Leo Sun has positions in ASML, Apple, and Qualcomm. The Motley Fool has positions in and recommends ASML, Advanced Micro Devices, Apple, Intel, Qualcomm, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Marvell Technology and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long March 2023 $120 calls on Apple, short January 2025 $45 puts on Intel, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.

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If You'd Invested $3,000 in Intel In 2015, This Is How Much You Would Have Today - The Motley Fool