After selling $134 billion in equities in 2024 and accumulating a $334 billion cash pile, Berkshire Hathaway CEO Warren Buffett appears to have anticipated the current stock market downturn, according to an analyst.
As the Nasdaq remains in correction territory after tumbling more than 10% from its last peak and the S&P 500 also enters a correction, Berkshire’s significant cash reserves have drawn attention.
A rally on Friday trimmed the S&P 500’s losses to under 10% from its all-time record, but the broader market uncertainty remains.
Buffett’s Strategic Positioning
Armando Gonzalez, founder of AI-powered research platform Bigdata.com, suggests that Buffett’s financial moves indicate foresight regarding market turbulence.
“Buffett’s actions over the past year have been a textbook example of positioning for turbulence,” Gonzalez said in an emailed response to Fortune.
Berkshire’s decision to sell $134 billion in equities in 2024 resulted in its cash reserves swelling to $334.2 billion—almost double the previous year and exceeding its stock portfolio, which shrank to $272 billion.
Gonzalez also pointed to Buffett’s recent cautious tone regarding inflation and geopolitical instability. Buffett has particularly warned that President Donald Trump’s tariffs would drive prices higher.
“History shows when Buffett turns net seller, he often anticipates a period of subpar market performance,” Gonzalez said. “And once again, the Oracle of Omaha seems to have been ahead of the curve.”
Will Buffett Start Buying?
As stock prices remain depressed, speculation is growing about whether Buffett will deploy his massive cash reserves to make acquisitions.
To date, Berkshire has made some moderate stock purchases. However, Buffett traditionally seeks deep-value opportunities and is known for making major investments when valuations hit rock bottom.
During the 2008 financial crisis, for example, he invested $3 billion in General Electric as its stock price plummeted.
In his latest letter to shareholders, Buffett reiterated his long-standing belief that valuations remain high. Gonzalez believes Buffett might consider buying, but only under the right conditions.
“He has no interest in timing the market’s bottom, nor does he chase short-term rebounds,” Gonzalez said. “Instead, he waits for moments when fear drives prices to levels where the risk-reward equation tilts decisively in his favor.”
If Buffett does decide to act, Gonzalez expects any move to be highly selective rather than a broad-market acquisition.
“In Buffett’s world, patience is more than a virtue, it’s a weapon,” he added.
Possible Moves: Insurance and International Expansion
CFRA Research’s Cathy Seifert told Fortune that Buffett could expand Berkshire’s insurance holdings, though she noted that valuations are still not significantly low.
Meanwhile, the cash Buffett has allocated to Treasury bonds continues to yield solid returns, and the environment for corporate acquisitions has shifted.
Buffett has also demonstrated a growing interest in Japanese trading companies, signaling a possible push for international diversification.
Since 2019, Berkshire has invested in Japan’s five largest “sogo shosha” trading houses—Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo.
These firms, which invest across multiple sectors both domestically and abroad, operate “in a manner somewhat similar to Berkshire itself,” Buffett wrote in his annual letter.
Potential Sale of HomeServices of America
As Berkshire’s cash pile continues to grow, speculation is rising about a rare potential sale within the conglomerate.
The Wall Street Journal recently reported that real estate brokerage Compass is in advanced talks to acquire Berkshire Hathaway’s HomeServices of America.
According to Berkshire’s annual report, HomeServices operated 820 brokerage offices and had 270 franchisees in 2024.
Berkshire Hathaway did not respond to Fortune’s request for comment.
EU Considers Strong Retaliation as Trump Escalates Trade War
