If any investor has stood the test of time, it is Warren Buffett, and with good reason. For years, the “Oracle of Omaha” has had a rock-star-like presence in the investing world. His annual Berkshire Hathaway shareholders meeting draws thousands of loyal fans who are investors.
24/7 Wall St. Key Points:
- Berkshire Hathaway Inc. (NYSE: BRK-A | BRK-A Price Prediction) is up a stunning 26% in 2024.
- Warren Buffett has been on a selling spree this year and has $325 billion in cash.
- With the major stock indices at all-time highs, Berkshire Hathaway also trades at a premium to its historical valuation.
- Is Berkshire Hathaway a good fit for your portfolio? Find a financial advisor near you for a portfolio checkup today. Click here to get started. (sponsored)
Buffett has been selling in 2024
Long-time investors and Buffett mavens are familiar with his quote, “His favorite holding for an S&P 500 stock is forever.” So it is somewhat surprising to report that for all of Berkshire Hathaway’s success and stature in the investment world, it was a net seller of shares in 2024. Because Berkshire Hathaway is trading at a premium, Buffett halted buybacks of the investment conglomerate in the third quarter. Expect the same as we close out the fourth quarter of 2024. He also sold massive chunks of Apple Inc. (NASDAQ: AAPL) and Bank of America Corp. (NYSE: BAC) positions during 2024.
Is Berkshire Hathaway a Buy, Sell, or Hold in 2025?
While rich on a historical level, investors need to remember that much of Berkshire Hathaway, worth just shy of $1 trillion, is invested in privately held companies that do not trade on any major indices. Top companies like GEICO, Dairy Queen, Duracell, and more are attractive assets that, in many cases, can only be acquired via owning Berkshire Hathaway shares. While likely not a candidate to be sold, investors should hold current shares and look to add if there is a steep market correction in 2025. Those looking to enter and start a position should wait for a sell-off.
What will Warren Buffett do with all of the cash?
With an estimated $325 billion in cash and short-term Treasury holdings, it is clear that the sky-high valuations of the Nasdaq, S&P 500, and the Dow Jones industrials have Buffett concerned. After a gigantic two-year rally that kicked off in the fall of 2022 on the back of an artificial intelligence-driven tech explosion, the S&P 500 now trades at a stunning price-to-earnings (P/E) ratio of 30.754. Buffett will likely continue to bide his time and look for deep value after a 2025 sell-off.
Did Berkshire Hathaway buy anything in 2024?
The only meaningful position Berkshire Hathaway put on in 2024 was buying 1,277,256 of the outstanding shares of Domino’s Pizza Inc. (NYSE: DPZ), which is 3.7% of the float. The company also purchased a small position of Pool Corp. (NASDAQ: POOL), which amounted to 404,507 shares worth $146,652,488.
What will happen when Warren Buffett dies?
Greg Abel, a Canadian businessman who has been board chair and CEO of Berkshire Hathaway Energy and vice-chairman of non-insurance operations since January 2018, is slotted to succeed Buffett after his death. Buffett’s longtime partner and righthand man, Charlie Munger, died in 2023, just five weeks shy of his 100th birthday. Wall Street analysts and managers have said that Mr. Abel fully embraces Berkshire’s culture, which includes extreme decentralization that gives business units broad autonomy.
That means more significant holdings, such as the BNSF railroad and GEICO, each with thousands of employees, and smaller units, such as Borsheim’s jewelry, which has about 142 employees, can run without interference from Berkshire headquarters, which employs only about 26 people.
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