This pullback hasn’t deterred me from buying more stocks and funds in my ISA however, as investing within an ISA remains one of the best ways to build wealth over the long term. With that in mind, here’s a look at three moves I made in my account last week.

I’m still buying Big Tech stocks in my ISA

The first move I made was to buy more Microsoft (NASDAQ: MSFT) shares. I snapped up stock at the $244 level. The reason I added to Microsoft is that I think it should hold up relatively well if we see a recession. Businesses are not going to suddenly stop using Office.

Meanwhile, I think the company has considerable long-term growth potential, thanks to its cloud computing business, Azure. It’s worth noting that Credit Suisse analysts believe the cloud growth opportunity is not reflected in current estimates.

Microsoft shares could keep falling in the short term, of course. Especially if the technology sector continues to underperform. However, I’m bullish on the long-term story here, and with the stock now trading with a forward-looking P/E ratio of 23, I think the valuation is attractive.

I want inflation protection

I also bought more shares in payments giant Visa (NYSE: V) last week. I picked up stock near the $194 level. I like Visa right now for several reasons. Firstly, the company has built-in inflation protection. It takes a cut from every transaction, so price rises actually benefit.

Secondly, if economic conditions continue to deteriorate, I’d expect more consumers to turn to credit cards. This should benefit Visa (it doesn’t have any credit risk – it simply operates the payments network).

Meanwhile, the long-term growth story here is compelling. In the decade ahead, trillions of transactions will shift from cash to card.

One risk I’m monitoring here is the threat of new payments technologies (e.g. Buy Now Pay Later). These could potentially impact growth.

I’m comfortable with this risk, however. And with the stock trading at around 23 times next financial year’s projected earnings, I think I picked up shares at a reasonable valuation.

I’m investing with ‘Britain’s Warren Buffett’

Finally, I also added to my holding in Fundsmith Equity. This is a global equity fund run by Terry Smith – who is often called ‘Britain’s Warren Buffett’ due to his excellent investment track record.

One reason I bought more Fundsmith units is that it invests in high-quality, resilient businesses. Examples of stocks in the fund include Diageo, Estée Lauder, and PepsiCo. These are the kinds of businesses I want to own in the current environment, where economic uncertainty is high.

The fund also tends to invest in businesses that have high gross margins and pricing power. These kinds of companies should, in theory, be protected from inflation, to a degree.

One issue here is that a lot of Fundsmith stocks do have higher valuations. This could be a problem in the short term if investors continue to offload expensive stocks.

I’m thinking long-term here, however. And I’m convinced this fund will boost my Stocks and Shares ISA in the long run.

Here, I’m going to highlight two ‘megatrend’ stocks that I’m very bullish on right now. I own both of these stocks myself, and I expect them to power my portfolio higher in the years ahead.

Poised to benefit from ‘The Great Resignation’

First there’s Upwork (NASDAQ: UPWK), which is listed in the US. It operates the world’s largest work marketplace, connecting millions of businesses with independent talent from around the world.

The megatrend I expect Upwork to benefit from is what’s known as ‘The Great Resignation’. This is an ongoing trend in which employees are resigning from their nine-to-five jobs en masse in an effort to gain a better work/life balance and have more flexibility in their lives. According to a study by Adobe, the exodus is being driven by Millennials and Generation Z, who are more likely to be dissatisfied with their work.

This trend should play right into Upwork’s hands. Using its platform, freelancers from a broad range of industries, including software development, graphic design, accounting, writing, legal, and business consulting, can gain short-term work. It’s a win-win situation. Businesses can save on costs by hiring freelancers, while freelancers can make decent money without having to work nine to five.

Upwork’s latest results showed that the company is growing at a healthy rate at present. For the final quarter of 2021, gross services volume (GSV) was up 35% year on year to $980m. Meanwhile, revenue was up 29% year on year to $136.9m.

It’s worth noting that the firm is investing heavily for growth, so it’s unprofitable at present. Given the lack of profitability, this stock could be very volatile.

However, I’m comfortable with short-term price volatility. In the long run, I expect this company to get much bigger. I think the long-term growth potential here is enormous.

A global megatrend that has a long way to go

The second stock I want to highlight is Visa (NYSE: V), which is also listed in the US. A large-cap financial technology (FinTech) company, it operates the world’s largest electronic payments network, connecting consumers, businesses, and banks in more than 200 countries.

The megatrend I expect Visa to benefit from in the years ahead is the global shift from cash to electronic payments. In recent years, we’ve seen a huge shift in the way consumers pay for goods and services, with billions of transactions made digitally. We could still be in the early days of this trend, however. In some countries such as India and Mexico, cash is still used in more than 80% of transactions today. It’s worth noting that experts expect the global digital payment market to reach $12.5trn by 2027, up from $6.7trn in 2021. This should benefit Visa.

Of course, one risk here is new innovations in financial technology. Crypto is an example. Some people believe that crypto networks could potentially replace the credit card networks. This is certainly a risk I’m keeping a close eye on.

However, I’m very bullish on Visa. With the stock currently trading at around 30 times this year’s forecast earnings, I think it’s a great time to build my position.

However, although he has experienced multiple market sell-offs, Buffett has never changed his investment strategy. This is something I am trying to copy for my own portfolio. 

Rather than trying to time the market and predict the next stock market crash, which is all but impossible, I am focusing on finding the market’s best companies and sticking with these businesses for decades. 

With that in mind, here are three Buffett stocks I have been buying as a way to insulate my portfolio from a market decline. 

Stock market crash protection 

The first company is Buffett’s conglomerate, Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B). This corporation has several qualities that suggest it is the perfect vehicle to own to protect against uncertainty. 

Firstly, the firm has one of the most robust balance sheets of any Fortune 500 company. It has almost no debt and $140bn-plus of cash. As well as these resources, the corporation owns $300bn-plus of liquid securities, stocks and shares it can sell at any moment to realise cash. 

Not that the enterprise is likely to need cash anytime soon. Berkshire is built around a few core businesses, which are cash cows. From its railway unit to its utility division and insurance arm, the establishment owns some of corporate America’s largest and strongest companies. 

Warren Buffett’s reputation

The company’s size also gives it a solid competitive advantage over peers. Thanks to Buffett’s reputation, Berkshire has the pick of business deals. It can buy smaller firms and make deals with larger corporations that would be impossible with other partners.

For example, in the financial crisis, Buffett moved quickly to provide tens of billions of dollars in capital to struggling companies and demand a double-digit interest rate for the privilege. 

As such, not only is Berkshire strong enough to survive a stock market crash, but it also has the resources to take advantage of the situation. 

Unfortunately, the company’s association with Buffett is also a drawback. The billionaire is not getting any younger and, aged 91, he may not be at the helm for much longer. When he departs, the enterprise will lose its visionary CEO, and it could start to struggle for direction. 

Payment giant 

Considering the risk outlined above, I have been diversifying away from Berkshire, buying other stocks that I believe the ‘Oracle of Omaha’ would acquire for his portfolio or already owns. 

One of these companies is the payment processor Visa (NYSE: V). Buffett owns $2bn of this group in his Berkshire portfolio, and I also own the stock. 

Visa manages the global payment network for Visa cards. Every day it processes trillions of dollars transactions, and this number is only expanding. The company reported a spike in transactions throughout the pandemic as consumers moved away from cash.

Unfortunately, the corporation also suffered a decline in cross-border transactions, which are more lucrative. This decline hit its overall growth rate. 

Investors have also been expressing concern about the rise of other digital payments and cryptocurrencies. Some analysts believe that these payment methods could start to chip away at Visa’s position in the market. This is probably the most significant challenge the company faces right now. It is something I will be keeping an eye on as we advance. 

Still, I think this business has all the qualities I want to see in a company that can protect my portfolio from a stock market crash. If there is a crash, it seems unlikely there will be a significant decline in card transactions. Therefore, Visa should continue to generate cash. Management can then use this cash to acquire smaller peers to boost growth. The firm could also return some of its profits to investors with dividends and share repurchases. 

Former Warren Buffett stock 

The final stock I would buy for my portfolio is the retailer Tesco (LSE: TSCO). Buffett currently has no interest in this business, but he has owned the stock in the past. He sold the position after the company’s accounting scandal in 2014. 

Tesco is currently having to fight off a number of headwinds. These include rising wages and supply chain costs. The organisation is trying to reduce costs to maintain margins, but if the supply chain issues continue, I think these challenges could impact the company’s overall profitability. 

Nevertheless, as the largest food and drink retailer in the UK, the firm has a captive market. Consumers will always need to eat and drink, suggesting there will always be a market for its products. As such, it seems unlikely that its revenues will decline substantially in the event of a stock market crash.

Shares in the company might come under pressure but, fundamentally, the business should remain on track. This suggests that the stock should reflect the growth of the underlying business over the next few decades, and not short-term market fundamentals. 

In addition to these qualities, the stock also supports a healthy dividend yield of around 4%. Compared to Visa and Berkshire Hathaway, this level of income is incredibly attractive to me. That is why, although Buffett is no longer a fan of the company, I would acquire Tesco to provide me with some stock market crash protection. 

Hidden in plain sight

Sometimes there is nothing either mysterious or hidden about true value. Like many other people, I am a holder of just one of 1.7bn Visa (NYSE: V) cards in circulation worldwide. A simple look into my wallet reveals the iconic logo that has become synonymous with payments the world over. With 188bn transactions processed in 2020, Visa outstripped its nearest competitor (Chinese giant, UnionPay) by almost 40bn transactions. This makes it the largest payment card network processor in the world.

Buffett’s Berkshire Hathaway currently has just 0.5% of its portfolio in this stock. Visa is therefore one of its smallest holdings. I won’t go into why I think this may be the case. I will say though, that Visa’s numbers suggest a very strong competitive advantage.

Processing payments and profits

By just looking at the profit margins on this business, I can see why Buffett picked it. Over the past 10 years, Visa has consistently grossed 80%. In turn, net profits consistently come in between 40% and 50% of total revenues of $24bn. There are simply not a lot of businesses of Visa’s size that can achieve this – almost none in fact. For investors, the beauty is that Visa is expected to rake in revenues of $28bn in 2022. In 2021, the company generated $15bn in free cash flow. Free cash flow is a metric beloved by value investors as it is a strong indicator of the ability of the business to pay its debts, reinvest in the business, and pay dividends to its investors. 

Visa, Mastercard, American Express, and Paypal have literally been locked in a contest for global dominance since as early as the 1960s. However, as recently as 2013 a threat has arisen in the East in the form of UnionPay. The Chinese-owned giant has 70% market share in Asia-Pacific. Despite having been around for less than a decade, it is already the second-largest processor worldwide by purchase transactions. The advent of more and more new technologies has expanded an already growing research and development budget for Visa and its competitors. It’s also worth noting that Buffett trimmed his position in Visa by 4.3% as recently as November 2021.

Looking into the future 

While the industry continues to grow, it’s clear that Visa’s dominance will mean it can grow to keep up. This was shown by how quickly it pivoted its systems to accommodate cryptocurrencies. Visa has a truly rare competitive edge that I think will last well into the future. Buffett recognised this and I’m betting he was right.

But there are two in Buffett’s portfolio, in particular, that strike me as ‘no-brainers’. I’m talking about payments companies Mastercard and Visa. Here’s why I’d follow Buffett into these stocks today.

Mastercard and Visa are both global electronic payment-processing companies that help consumers, merchants, financial institutions, and government entities move money safely and efficiently. You can think of them as the ‘plumbing’ of the world’s financial system. These companies don’t issue credit or debit cards directly. Instead, they provide networks that allow consumers and businesses to make transactions, and process all the transactions.

Huge growth potential

With the world moving away from cash and shifting to electronic payments, both Mastercard and Visa appear to have a huge amount of potential.

Both companies have registered strong revenue growth over the last decade as more payments have been made by card. However, the growth story here appears to have plenty of room to run. According to Allied Markets Research, the global credit card payments market is set to grow by 9% per year between 2021 and 2028. This means that trillions of transactions are set to shift from cash to card in the years ahead.

The ease and convenience of paying for goods and services electronically is expected to be one key growth driver. Adoption in the emerging markets, and the growth of the online shopping industry are also expected to drive growth.

Why I’d buy now

With so much long-term growth potential, one would expect these Buffett stocks to be popular. However, this isn’t the case. Recently, both stocks have been a little out of favour due to the fact that travel spending has been lower during the pandemic.

So, I think now is a great time for me to be buying because both stocks have reasonable valuations, in my view. At present, Mastercard trades at 38 times this year’s earnings while Visa trades at 33 times.

I don’t expect these stocks to trade at these levels for long. That’s because both companies are starting to see a rebound in travel spending. And this is boosting revenues significantly. Last week, for example, Mastercard posted quarterly revenue growth of 27% while Visa posted top-line growth of 24%.

Attractive risk/reward profiles

Of course, there are risks to consider here. One is further Covid-19 variants. If new variants emerge and the travel industry is hit again, these two companies will see their revenues dip.

Another is new payments technologies such as blockchain and crypto. In theory, crypto could make Mastercard and Visa obsolete.

Overall, however, I think these two Buffett stocks offer very attractive risk/reward propositions right now. In the near term, they look set to benefit from the return of travel. Meanwhile, in the long run, they look set to benefit from the shift to electronic payments.

As such, I own a handful of US equities in my portfolio. These are my three favourite US stocks to buy today. 

Stocks to buy for growth

The first company on my list, which I already own and would be happy to buy more of, is Visa (NYSE: V).

The corporation operates one of the world’s main payment networks. It connects buyers and sellers who are using Visa-branded networks and cards. With the number of cashless transactions rising worldwide, the company is one of the primary beneficiaries. 

What’s more, as one of the world’s largest payment network operators, Visa’s size is a substantial competitive advantage. It would cost a competitor tens of billions of dollars and many years to take over the firm’s position in the market. 

These are the two main reasons I would buy the stock for my portfolio today. However, the firm can’t take its position in the market for granted. Competitors are nipping at its heels. The company needs to stay alert to fend off the competition, or it could fall behind. 

Growing market 

Sticking with companies that have robust competitive advantages, I would also acquire Nvidia (NASDAQ: NVDA). 

The organisation is one of the world’s most prominent designers and producers of high-performance computer processors. The demand for these is exploding as the market for digital services also explodes. 

Nivida is reaping the benefits of this market expansion. The company’s net income lept 84% year-on-year in the third quarter. The organisation reinvests virtually all of its income back into processor development.

This spending only helps reinforce the group’s leading position in the market. As long as the firm continues with this strategy, I reckon its growth should also continue. 

Challenges it could face going forward include the supply chain crisis and rising input costs, which may increase the costs for consumers. 

Market maker 

I also think Goldman Sachs (NYSE: GS) is one of the best stocks to buy in the US today. I would acquire the shares because the company has an unrivalled franchise in the US equity markets.

The investment bank is one of the most recognisable brands on Wall Street. It manages the wealth of the rich and famous through its wealth management arm. This brings in a steady stream of recurring income. 

At the same time, the group has a leading position in the market for taking companies public. Over the past two years, this division has been a healthy profit centre for the organisation. 

Thanks to its position in these two markets, I think Goldman has a definite competitive advantage, although this is a competitive business. Keeping customers happy is one of the main challenges the business faces, or they could move to rivals.

Visa is the sort of company I’m happy to buy and hold in my portfolio if I can get it at the right price. Its iconic brand, installed user base of both customers and merchants and strong earning power make it an attractive business to me. Is now the time for me to buy Visa to hold in my portfolio?

A changing payments landscape

The Amazon news doesn’t really bother me at all, or affect my long-term take on the prospects for Visa. I expect it’s a bargaining ploy. In the end, I reckon Amazon needs Visa just like Visa needs Amazon. It does risk hurting profit margins at Visa, though.

More importantly for me, I think it’s indicative of a wider shift taking place in the payments landscape. From the growing prominence of Paypal to the rise of alternative payment methods like Square, the payments industry is undergoing profound change. Once upon a time, card providers such as Visa and Mastercard were insulated from competition because the cost of installing card equipment meant businesses were happy to accept only one or two cards. That has all changed now, which puts downward pressure on profit margins. I think that’s a risk not only for Visa, but also for competitors such as Mastercard and American Express.

A bull case on Visa

Despite that, I continue to see real strengths in the Visa business. It has spent decades building a strong, well-known brand and I think that will have value for a long time to come.

Revenues at the company have more than doubled over the last decade. Last year’s earnings per share were $5.78 – comfortably more than double what they had been just five years beforehand. That sort of performance makes me confident that this isn’t a company on the ropes. In fact, I think Visa’s best days may be ahead. With a growing global middle class and increasing use of digital payments, it has plenty of white space into which to expand its business. Visa’s strong brand reduces the threat of newcomers like Square. In the end, I reckon a company like Visa could well buy promising technologies and roll them out more widely under its more familiar brand.

My next move on the Visa share price

But even after the fall, I don’t see the Visa share price as particularly attractive right now. While I think it’s a great business, its shares trade on a price-to-earnings ratio close to 30 and yield under 1%. The Amazon announcement might be the harbinger of more public tussles to come, which could drive the Visa share price lower. So I will be watching and waiting, to see whether Visa reaches what I consider an attractive price level to add it to my portfolio.

That 42% profit growth

Visa’s strong share price performance this year has been reflected in its results. Indeed, in the recent full-year trading update, it said Q4 net income reached $3.6bn, which was a 68% increase year-on-year. Such strong growth was partly due to last year’s resolution of a tax item, which decreased profitability slightly, yet such strong profit growth is still very impressive. Indeed, excluding all exceptional items, net income was up by the aforementioned 42%.

Over the full year, Visa also recorded net income of $12.3bn, which was a 13% increase on last year. This was driven by the increase in processed transactions, which rose 17%. 

Those recent results have helped justify why the Visa share price has risen so much. It has also been able to raise shareholder returns, and over the past year, $11.5bn has been returned in the form of dividends or share buybacks. Shareholder returns seem likely to increase further next year, especially as the quarterly cash dividend has just been increased by 17% to over 37 cents per share. Nonetheless, while the Visa share price has managed to soar over the past year, it has still underperformed many other S&P 500 stocks.

Why has Visa underperformed its index?

There are a couple of risks that must be considered in relation to Visa stock. Firstly, it’s expensive. In fact, despite its recent profit growth, its price-to-earnings ratio is still around 37. This demonstrates that growth is expected to be extremely strong, and any indication that growth is slowing will be punished severely.

Secondly, I fear that there are competition issues. Indeed, like many other S&P 500 stocks, Visa has attempted to grow through acquisitions into new markets. It has faced some difficulties recently though, as a $5.3bn deal with Plaid ran into regulation problems and was abandoned. If this becomes a regular occurrence, I don’t think that organic growth alone will be sufficient to justify Visa’s current share price. For this sake, I hope and think that this is just a one-off.

So, why would I still buy this S&P 500 stock?

While these remain risks to consider, I still think that Visa has room to grow. In an ever-increasing cashless society, Visa is a prime beneficiary. Cross-border transactions also seem likely to recover further next year. In addition, with net debt at only $2.5bn, I feel the company can continue to return more money to shareholders. This is another factor that could see the share price climb higher. Therefore, I’d happily buy this S&P 500 stock for my portfolio.

Recently, I was scanning Buffett’s portfolio for investment ideas. Here’s a look at the top three stocks I’d buy today.

A Buffett stock with huge growth potential

The first is Amazon (NASDAQ: AMZN), the major player in both online shopping and cloud computing. This year, Amazon shares have underperformed the market so I think it’s a good time to be building a position in the stock.

Amazon’s a massive company with a market capitalisation of around $1.7trn. However, I expect it to get much bigger in the decade ahead. Between now and 2030, the e-commerce industry is expected to grow around 9% per year while the cloud computing industry is forecast to grow 18% per year.

Amazon shares are expensive. Currently, they trade at 50 times next year’s estimated earnings so this means the stock could be volatile.

But this high valuation doesn’t deter me. Amazon shares have always been expensive and avoiding them because of the high valuation is arguably one of the biggest mistakes investors could have made over the last decade.

One of the world’s most powerful brands

The next Buffett stock I’d buy would be Apple (NASDAQ: APPL). This is his largest holding (by a wide margin). Currently, his position here is worth around $130bn. Clearly, he’s bullish on the stock.

There’s a lot to like about Apple, in my view. For starters, the company has a very strong brand. According to Kantar, Apple is the second most powerful brand in the world (behind Amazon, incidentally). This brand power provides a competitive advantage.

Secondly, the company’s very profitable. Over the last three years, return on capital employed has averaged 29%, which is excellent. Third, Apple’s buying back a ton of its own shares. This is essentially pushing up earnings per share.

One risk to consider here is that, in the future, Apple may not be able to get away with charging such high fees in its App Store. This could slow growth.

I think this risk is factored into the valuation however. The stock currently sports a forward-looking P/E ratio of about 26, which I think’s good value.

Benefiting from the shift away from cash

Finally, my third pick would be Visa (NYSE: V), which operates the largest payments system in the world.

I like Visa for two main reasons. Firstly, it stands to benefit from the shift away from cash in the years ahead. Over the next decade, trillions of transactions are set to move from cash to cards and electronic payments.

Secondly, Visa looks set to benefit from the growth of online shopping. For every $1 spent online globally today, around 43 cents goes through the Visa network.

One risk I’m keeping a close eye on here is the threat that ‘buy now pay later’ poses. Some believe this could significantly impact the growth of the credit card industry.

Overall however, I’m very bullish on this Buffett choice. I think Visa’s a great stock to own for the long term.

Firstly, I’m quite comfortable with both my overall asset allocation and my stock portfolio right now. Secondly, I prefer to buy stocks during periods of market volatility when share prices are falling.

However, I did buy one stock for my portfolio last month. Interested to learn what it was? Read on and I’ll tell you.

The stock I bought in July

I bought US-listed Visa (NYSE: V) in July. I already owned a few Visa shares before last month’s purchase. However, my holding was quite small. I decided it was time to boost my position in the stock.

Why I’m bullish on Visa shares

There are a few reasons I’m bullish on Visa right now. The first is that, in the short term, I expect the company to benefit from the reopening of the global economy.

Visa operates the largest payments system in the world. For every dollar spent in physical retail globally, around 15 cents goes through its network. For every dollar spent online, around 43 cents goes through its network. It takes a small cut on every transaction. As economies reopen, travel picks up, and consumers ramp up their spending, Visa should prosper.

Already, the company is seeing revenues and earnings grow as economies improve. In its third-quarter, results for the three months ended 30 June, the company reported a 27% year-on-year increase in revenue and a 41% jump in adjusted diluted earnings per share.

I don’t expect growth to continue at this rate forever. However, the near-term prospects are certainly attractive, in my view.

Secondly, this is a company with significant long-term growth potential. Today, the bulk of purchases globally are still paid for with cash. This is set to change in the years ahead. Over the next decade, trillions of transactions are set to shift from cash to cards and electronic payments. Visa should benefit from this trend.

It’s also worth noting that Visa has recently been making acquisitions in the financial technology (FinTech) space in order to future-proof itself. Last month, it acquired UK FinTech Currencycloud. These kinds of deals should help it prosper in today’s digital world.

Warren Buffett likes Visa

The growth potential is not the only thing I Iike about Visa. I also like the fact it’s very profitable. Over the last four years, it’s generated an average return on capital of 24%.

Additionally, I like the fact that the stock is owned by some of the world’s top investors. Visa shares are owned by both Warren Buffett and Terry Smith of Fundsmith.

Risks

There are risks to the investment case, of course. One is the valuation. Visa’s growth potential hasn’t gone unnoticed by the market. This is a popular stock and its valuation is high, at 37 times 2021 forecast earnings. If future growth is disappointing, the stock could underperform.

The company also faces competition from Mastercard, PayPal, and other FinTech companies. This is another risk to consider.

Long-term potential

Overall however, I think the long-term risk/reward profile here is attractive. I’ll be holding this stock for the long run and I plan to buy more shares on pullbacks.