Hello,
Despite recent market volatility, Berkshire Hathaway (BRK.A, BRK.B) has demonstrated resilience, with its stock rising approximately 16% year-to-date in 2025, significantly outperforming the S&P 500’s 2% decline. This performance has fueled speculation about Warren Buffett’s strategy, particularly whether the “Oracle of Omaha” is capitalizing on the recent market correction to deploy Berkshire’s record $334 billion cash reserve. Let’s examine Berkshire’s current position
Berkshire Hathaway operates a diversified portfolio anchored by its world-class insurance operations, including GEICO. The company also owns Burlington Northern Santa Fe Railroad, a robust energy division, and a wide range of manufacturing, service, and retail businesses. Its $284 billion equity portfolio, featuring long-term holdings like Coca-Cola, American Express, and a reduced but still significant stake in Apple, continues to generate substantial investment income. In 2024, Berkshire reported approximately $30 billion in operating cash flow, underscoring its financial fortress status.
This diversified revenue stream and immense liquidity position Berkshire as a safe haven for investors during turbulent times. Buffett’s reputation for capitalizing on market downturns—evidenced by his $26 billion in deals during the 2008-2009 financial crisis—further bolsters confidence in the company’s ability to navigate corrections.
Recent market corrections, driven by concerns over President Donald Trump’s tariff policies and fears of a global trade war, have seen the S&P 500 drop over 11% from its February 2025 high. Many investors are watching Buffett, expecting him to deploy Berkshire’s massive cash pile to scoop up undervalued assets, as he famously advises to “be greedy when others are fearful.” However, evidence suggests Buffett has been cautious.
In 2024, Berkshire was a net seller of equities for nine consecutive quarters, offloading $134 billion in stocks, including significant reductions in its Apple (67% cut) and Bank of America (34% cut) holdings. Buffett also halted Berkshire’s stock buyback program in the third and fourth quarters of 2024, despite having repurchased $77.8 billion of its own stock since 2018. This pause, combined with a record cash hoard of $334 billion, indicates Buffett may believe valuations remain elevated or that greater opportunities lie ahead.
That said, Buffett has made selective purchases. In Q4 2024, Berkshire initiated new positions in Constellation Brands, Pool Corporation, Domino’s Pizza, Occidental Petroleum, VeriSign, and Sirius XM, with investments like VeriSign ($73 million) and Constellation Brands ($1.24 billion) reflecting Buffett’s preference for companies with strong fundamentals and competitive moats. These moves suggest Buffett is cautiously optimistic about specific sectors, particularly those tied to consumer spending and stable cash flows, but is not yet aggressively buying the broader market dip.
Berkshire’s stock has delivered a compounded annual return of 19.9% since 1965, nearly doubling the S&P 500’s performance over the same period. However, with a market capitalization exceeding $1 trillion and a price-to-sales ratio of 2.67 (a 34% premium to its 10-year average), significant near-term upside may be limited. The conglomerate’s size makes it challenging to find needle-moving investments, and Buffett’s recent restraint in buybacks suggests he views Berkshire’s stock as fully valued at current levels.
For long-term investors, Berkshire remains a compelling hold due to its diversified business model, strong cash flow, and Buffett’s disciplined capital allocation, now transitioning to designated successor Greg Abel. However, those expecting rapid gains should temper expectations, as Berkshire’s scale limits its ability to achieve exponential growth. Investors seeking to emulate Buffett’s strategy might consider his recent picks, such as VeriSign, which benefits from a near-monopoly in internet domain registries, or stalwarts like Coca-Cola, a Dividend King with a 3% yield.
For those considering new positions, waiting for a deeper market pullback could align with Buffett’s value investing principles, especially given his current cash-hoarding stance.
Despite recent market volatility, Berkshire Hathaway (BRK.A, BRK.B) has demonstrated resilience, with its stock rising approximately 16% year-to-date in 2025, significantly outperforming the S&P 500’s 2% decline. This performance has fueled speculation about Warren Buffett’s strategy, particularly whether the “Oracle of Omaha” is capitalizing on the recent market correction to deploy Berkshire’s record $334 billion cash reserve. Let’s examine Berkshire’s current position
Berkshire Hathaway operates a diversified portfolio anchored by its world-class insurance operations, including GEICO. The company also owns Burlington Northern Santa Fe Railroad, a robust energy division, and a wide range of manufacturing, service, and retail businesses. Its $284 billion equity portfolio, featuring long-term holdings like Coca-Cola, American Express, and a reduced but still significant stake in Apple, continues to generate substantial investment income. In 2024, Berkshire reported approximately $30 billion in operating cash flow, underscoring its financial fortress status.
This diversified revenue stream and immense liquidity position Berkshire as a safe haven for investors during turbulent times. Buffett’s reputation for capitalizing on market downturns—evidenced by his $26 billion in deals during the 2008-2009 financial crisis—further bolsters confidence in the company’s ability to navigate corrections.
Recent market corrections, driven by concerns over President Donald Trump’s tariff policies and fears of a global trade war, have seen the S&P 500 drop over 11% from its February 2025 high. Many investors are watching Buffett, expecting him to deploy Berkshire’s massive cash pile to scoop up undervalued assets, as he famously advises to “be greedy when others are fearful.” However, evidence suggests Buffett has been cautious.
In 2024, Berkshire was a net seller of equities for nine consecutive quarters, offloading $134 billion in stocks, including significant reductions in its Apple (67% cut) and Bank of America (34% cut) holdings. Buffett also halted Berkshire’s stock buyback program in the third and fourth quarters of 2024, despite having repurchased $77.8 billion of its own stock since 2018. This pause, combined with a record cash hoard of $334 billion, indicates Buffett may believe valuations remain elevated or that greater opportunities lie ahead.
That said, Buffett has made selective purchases. In Q4 2024, Berkshire initiated new positions in Constellation Brands, Pool Corporation, Domino’s Pizza, Occidental Petroleum, VeriSign, and Sirius XM, with investments like VeriSign ($73 million) and Constellation Brands ($1.24 billion) reflecting Buffett’s preference for companies with strong fundamentals and competitive moats. These moves suggest Buffett is cautiously optimistic about specific sectors, particularly those tied to consumer spending and stable cash flows, but is not yet aggressively buying the broader market dip.
Berkshire’s stock has delivered a compounded annual return of 19.9% since 1965, nearly doubling the S&P 500’s performance over the same period. However, with a market capitalization exceeding $1 trillion and a price-to-sales ratio of 2.67 (a 34% premium to its 10-year average), significant near-term upside may be limited. The conglomerate’s size makes it challenging to find needle-moving investments, and Buffett’s recent restraint in buybacks suggests he views Berkshire’s stock as fully valued at current levels.
For long-term investors, Berkshire remains a compelling hold due to its diversified business model, strong cash flow, and Buffett’s disciplined capital allocation, now transitioning to designated successor Greg Abel. However, those expecting rapid gains should temper expectations, as Berkshire’s scale limits its ability to achieve exponential growth. Investors seeking to emulate Buffett’s strategy might consider his recent picks, such as VeriSign, which benefits from a near-monopoly in internet domain registries, or stalwarts like Coca-Cola, a Dividend King with a 3% yield.
For those considering new positions, waiting for a deeper market pullback could align with Buffett’s value investing principles, especially given his current cash-hoarding stance.
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Free stock markets analysis Telegram channel:
t.me/stocksfromtechnicaleye
Paid trading group
patreon.com/thesharkke
Reliable broker
go.tradenation.com/visit/?bta=37130&brand=tradenation
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.