If I could only buy shares in one company for the next 10 years, here is what I would do

I look at investing with a long-term focus. And one way to do that is to think about which stocks that I would say today I would be happy to buy in the next ten years.

There aren't many companies that I can confidently say I think will be in better shape 10 years from now than they are today. But there is one that stands out from the rest.

Warren Buffett

It would be reckless to think that Warren Buffett would run Berkshire Hathaway (NYSE:BRK.B) 10 years from now. But I think the business will be in very good shape.

There is no way around the fact that Buffett's skill and ability when it comes to making deals is irreplaceable. That means that the distribution of funds will be very difficult.

This is perhaps the biggest risk for Berkshire Hathaway over the next decade or so. But the assets the company already owns will continue to be more valuable.

Be it insurance, railways or utilities, the company's subsidiaries have certain advantages that differentiate them from their competitors. And I don't see this changing in the next ten years.

Insurance

Everywhere I look at Berkshire's subsidiaries, I see huge competitive advantages. And that starts with insurance – a major part of the company's operations.

Berkshire earns a better return on the premiums it collects than other insurance companies. This is because it invests these in common stocks, instead of bonds.

Some insurance companies usually cannot do this. Berkshire, however, has so much cash that it can meet its statutory requirements while investing its premiums in the stock market.

In the long run, this makes a huge difference in the return on investment an insurance business can generate. And I don't think it's something that will expire if Buffett is not in charge.

Competitive advantages

Berkshire's large cash balance helps with its other large subsidiaries, such as its railroads. The biggest problem with the railway industry is that the infrastructure is very expensive to maintain.

For many companies, this means large amounts of debt. But the Berkshire franchise benefits from an easy source of capital from the parent company.

The same is true for the utilities sector. Energy businesses are expensive to run and this is a challenge for firms with shareholders seeking dividends.

Berkshire, however, does not need to take shares in its subsidiary. As a result, its resource business can reinvest its capital into new opportunities in ways that others cannot.

Diversity

It is certain that I will not just buy a single stock for the next 10 years. In fact, I'd say it's almost as likely as Cathie Wood — rather than Greg Abel — to replace Buffett.

The main reason for this is diversity. I think this is important when it comes to building an investment portfolio and it doesn't necessarily have to have good results.

That said, having the best insurance, the best railroad, and the best service business adds up to some diversity. And that's what Berkshire Hathaway shares offer.