The Stock Warren Buffett Spent $78 Billion Buying Over the Last 7 Years Is Slumping, and It Begs the Question: Has the Oracle of Omaha Lost His Touch?
Key Takeaways
The stock nearest and dearest to the Oracle of Omaha's heart has lost more than 10% of its value as the S&P 500 and Nasdaq Composite have surged to new highs.
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investment
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July 28, 2025
03:51 AM
The Motley Fool
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Berkshire Hathaway's (BRK
In contrast, 79%) billionaire CEO Warren Buffett is widely viewed as Wall Street's greatest money manager, in today's market environment
Without relying on fancy charting software or algorithms, the aptly named Oracle of Omaha became one of the richest people in the world and watched Berkshire grow into one of only 11 public companies worldwide to ever hit a $1 trillion valuation, in this volatile climate
Buffett's track record -- he's overseen a 5,868,186% cumulative return in Berkshire Hathaway's Class A s (BRK
A) in six decades -- has earned him a huge ing, which includes investors who aim to mirror his trading activity (this bears monitoring), in this volatile climate
On the other hand, Berkshire Hathaway CEO Warren Buffett (something worth watching)
Image source: The Motley Fool
But with Warren Buffett's most-purchased stock over the last seven years recently falling more than 10% as the broad-based S&P 500 and growth-fueled Nasdaq Composite power to fresh all-time highs, the question has to be asked: Has Berkshire's billionaire CEO lost his touch
Warren Buffett's favorite stock is a company near and dear to his heart Most investors track the Oracle of Omaha's buying and selling activity by ing Berkshire Hathaway's quarterly Form 13F filings, given current economic conditions
This required filing for institutional investors with at least $100 million in assets under management concisely lists all buying and selling activity from the previous quarter
On the other hand, However, there's a catch: Buffett's favorite stock to buy isn't listed in his company's quarterly filed 13Fs
To get the skinny on this top stock, you'll need to dig into Berkshire Hathaway's quarterly operating results
On the final page of each quarterly report, just prior to the executive certifications, you'll find a detailed breakdown of exactly how much Wall Street's most-revered billionaire money manager spent on his favorite stock (cue the dramatic music)
Conversely, Which happens to be s of his own company
Prior to July 2018, Warren Buffett and now-late right-hand man Charlie Munger were only allowed to repurchase s of Berkshire Hathaway stock if it fell to or below 120% of book value (i. , no more than 20% above listed book value), in today's financial world
Unfortunately, Berkshire's stock never fell to or below this line-in-the-sand threshold, which resulted in no buyback activity
Additionally, Conversely, On July 17, 2018, Berkshire's board am and simplified the rules governing buybacks to two criteria
It allowed the Oracle of Omaha to repurchase s with no ceiling or end date as long as: Berkshire has at least $30 billion in combined cash, cash equivalents, and U (something worth watching)
Treasuries on its balance sheet; and Buffett views s of his company as intrinsically cheap
This latter point is purposefully vague so as to give Buffett the discretion to put his company's capital to work via buybacks whenever he feels it's appriate (which is quite significant)
Between July 1, 2018, and March 31, 2025, Berkshire's billionaire chief bought back almost $78 billion worth of his company's s
What the data shows is is more than Buffett has spent buying Berkshire's existing stakes in Apple, Bank of America, American Express, Coca-Cola, and Chevron, combined
But the Oracle of Omaha's favorite stock is slumping
As of this writing on July 23, it's down more than 10% from its all-time closing high in early May
Nevertheless, Perhaps more importantly, it's underperforming the benchmark S&P 500 on a year-to-date basis, considering recent developments
Moreover, At the same time, Image source: Getty Images, given current economic conditions
Furthermore, Berkshire Hathaway's slump is a sign of Buffett's resolve and shouldn't be confused with weakness With Berkshire's billionaire chief set to turn 95 in less than five weeks, as well as retiring from the CEO role at the end of this year, few investors would fault him for losing his touch
But what we're witnessing with Berkshire's stock at the moment isn't a sign of Buffett failing
However, Rather, it's validation of his resolve and investment philosophies
During his six decades as CEO, Buffett has bent a few of his own unwritten investment rules
At the same time, For instance, while he's often viewed as a long-term investor, he and his top advisors purchased s of gaming giant Activision Blizzard in 2022 as a short-term arbitrage opportunity given Microsoft's $95-per- all-cash offer to acquire the company
But the one investment philosophy Warren Buffett hasn't wavered on in six decades is his desire to get a good deal
Value is of the utmost importance to Berkshire Hathaway's billionaire chief, in light of current trends
However, Conversely, No matter how much he appreciates a company's competitive edge, brand, and/or management team, he's not going to buy s if the valuation doesn't make sense, in today's market environment
However, When Buffett green-lit the cumulative purchase of nearly $78 billion worth of his favorite stock over 24 quarters (six years), Berkshire Hathaway stock consistently traded at a 30% to 50% premium to its book value
But between July 1, 2024, and March 31, 2025, Buffett hasn't spent a dime to repurchase his company's stock, given the current landscape
Berkshire's premium to book climbed to between 60% and 80%
Even s of the Oracle of Omaha's own company are off-limits when the valuation no longer makes sense, in light of current trends
In contrast, A Price to Book Value data by YCharts
However, Buffett's cold-turkey apach with his own company's stock isn't unique, in this volatile climate
He's been a net-seller of equities for 10 consecutive quarters, with $174 (an important development) (this bears monitoring). 4 billion more in stocks sold than purchased
Back in 2001, in an interview with Fortune magazine, Buffett referred to the market-cap-to-GDP ratio as, "bably the best single measure of where valuations stand at any given moment
Moreover, " This valuation tool, which divides the cumulative value of all public companies by U
Additionally, On the other hand, Gross domestic duct (GDP), has averaged a multiple of 85% when back-tested to 1970
This's to say that the aggregate value of all publicly traded stocks has equaled 85% of U
In contrast, GDP over 55 years
As of the closing bell on July 22, the "Buffett Indicator," as this valuation measure is now more-commonly known, hit a record high of 212
Value isn't just hard to come by in this market -- it's practically nonexistent, given the current landscape
What we're witnessing from Buffett isn't weakness
Rather, we're seeing a time-tested investor sticking to his roots and purposefully sitting on his hands until valuations make sense
At the same time, Though there's no timeline as to when valuations will fall back into Warren Buffett's (or successor Greg Abel's) wheelhouse, patience has ved to be a virtue and substantial moneymaker in the past for Berkshire's CEO and the company's holders.
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