Once again, Warren Buffett looks like a genius.
The legendary investor and chair of Berkshire Hathaway is being praised by analysts, investors, and hedge fund managers for what looks like perfectly timed stock sales. Throughout 2024, Buffett, age 94, received a lot of scrutiny and criticism for selling massive amounts of stocks in Berkshire Hathaway’s portfolio.
While the bull market raged in 2023 and 2024, with the S&P 500 index posting back-to-back years of greater than 20% gains, Buffett pared his equity holdings. In fact, the Oracle of Omaha, as Buffett is known, was a net seller of stocks for nine consecutive quarters. Berkshire Hathaway ended 2024 with a record $334 billion of cash, which it held onto and did not deploy, despite ample criticism.
But now, with U.S. equity markets barreling towards a bear market defined as a decline of 20% or more from recent highs, Buffett once again looks prescient and ahead of the pack.
Perfectly Timed
Throughout last year, Buffett dramatically cut his holdings of Apple (AAPL) and Bank of America (BAC) stock, two of his largest positions. Apple has gone from comprising 49% of Berkshire Hathaway’s portfolio to 23%. The sales seem to follow Buffett’s maxim that investors should be “fearful when others are greedy and to be greedy only when others are fearful.”
Now, with the benchmark S&P 500 index down 10% in the last month and the technology-laden Nasdaq Composite index down 13% in the same time span, Buffett is being hailed again as the greatest investor of all-time. Hedge fund manager Anurag Singh recently said that “Warren Buffett’s cash call of $325 BN i.e., ~50% of portfolio does make sense after all” and appears to have been well timed.
Across the internet, retail investors are praising Buffett for what’s being called his “perfectly timed cash out” and for anticipating the “Trump Slump” that’s currently gripping markets. Additionally, a 2008 op-ed article that Buffett published in The New York Times (NYT) titled, “Buy American. I Am.” is going viral online right now.
BRK.B stock has risen 11% so far this year.
Is BRK.B Stock a Buy?
Berkshire Hathaway’s Class B stock currently has a Moderate Buy rating based on one Buy recommendation issued in the past three months. The average BRK.B price target of $557 implies 10.72% upside from current levels.
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