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. The reason.
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.