Warren Buffett has built a fabulous record of investing success.
And, for years, he has revealed himself as something of an artiste.
He brilliantly plays the public role of avuncular, mild-mannered corporate executive who hosts the annual Woodstock for Investors — the annual meeting of Buffett’s Berkshire Hathaway (BRK.A) and (BRK.B) .
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This year’s meeting, on May 3, will attract thousands to Omatha, Neb., where Berkshire is headquartered. Many more will watch on television. CNBC will broadcast the event live.
But never forget: Berkshire is a huge conglomerate, whose CEO may be 94, is worth close to $170 billion, and knows when to buy and sell. And doesn’t hesitate.
The company is built around a core of insurance operations that typically throw off lots of cash. So, it owns everything from the Burlington Northern Santa Fe Railroad, public utilities, Geico Insurance, Pilot truck stops and See’s candies.
It sports a market capitalization of $1.15 trillion. As of Friday that was good enough to be the seventh most valuable publicly-traded U.S.-based company, bigger than Tesla’s (TSLA) $911.5 billion market cap. And with almost no CEO drama.
Berkshire’s shares shares are having a very good year, all things considered, and the company is in a position, if it chooses, to do just about anything it wants — when it wants.
If there’s a worry this year, it may be how much exposure its insurance operations have to this winter’s Los Angeles fires. One estimate is that the damages may total $1.3 billion.
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The Charlie Munger philosophy
Berkshire Hathaway has persevered against all the great investing fads by sticking with a basic philosophy Buffett learned from his great friend, the late Charlie Munger.
When Buffett first took over Berkshire Hathaway, he bought stakes in companies with cheap prices.
Munger, Berkshire’s vice chairman who passed away in 2023, advised not to buy into a company just because the stock was cheap.
Buy stocks in great companies at reasonable prices, said Munger.
Buffett listened.
Berkshire made billions investing in Coca-Cola (KO) starting in the late 1980s. Analysts thought he’d paid too much. But Berkshire’s stake had increased in value by some 10-fold by 1998. Berkshire still owns 400 million Coca-Cola shares. Their value now: about $28.8 billion.
Attendees taking their seats in Omaha, Neb., for the Berkshire Hathaway annual shareholders meeting in Omaha, Nebraska, US, in May 2024.
The great Apple yarn
In 2016 for the first time, Berkshire Hathaway invested in a technology stock. Munger argued for buying into Apple (AAPL) because it actually wasn’t a tech company.
Rather, it was a great consumer company, something Warren Buffett understood. Just like he understood Coca-Cola, Dairy Queen and Ben Bridge Jeweler.
By 2018, Berkshire’s owned more than 1 billion Apple shares.
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Starting in 2024, with Apple shares up massively, Berkshire started to pare its holdings. The gains from those sales are now mostly in cash and Treasury securities and total around $318 billion after taxes. That’s one piece of the opportunity.
The other piece: Berkshire still owns 300 million Apple shares.
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Had Buffett lost his mind?
Many writers and analysts thought Buffett was close to mad to reduce Berkshire’s Apple stake. Apple was still rising. Why sell?
Maybe Buffett and Berkshire’s analytic team sensed the tech-stock runup was reaching in bubble territory.
In fact, Apple shares gained 30% in 2024, reaching an all-time high of $260.10 on Dec. 26.
Apple’s terrible, no-good, very bad year
Apple has mostly struggled this year, however. There’s the lack of pizzazz about its artificial intelligence capacity on new iPhones.
The biggest challenge: trying to figure out how to cope with Trump Administration tariffs that may be applied to products imported from China.
Most iPhones, its flagship product, are made in China, but Apple is scrambling to move the iPhone production that will be shipped to the United States to production facilities in India. That would reduce tariff exposure. But it will take time to get the new operation up and running.
Apple shares bottomed at $169.21 on April 8 in the panic over the Trump tariff plan, off 35% from the December top. Since then, as the Administration has exempted mobile phones and other products made in China from 125% tariffs; a 20% tariff is still in place.
Apple shares are up 24% from the April 8 bottom. The company reports fiscal second-quarter earnings after Thursday’s close.
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Berkshire’s year of surprise
But there are several ironies to this story.
Berkshire Hathaway’s remaining 300 million Apple shares were worth $62.8 billion as of Friday. Their total value is bigger than the 1 billion shares Berkshire owned in 2018.Berkshire shares are up about 17% so far in 2025. The S&P 500 is down 6.1%. Apple is down 16.7%.
What to do with all that cash
Berkshire now has a $318 billion to deploy. Or, better, Or, better, all that cash plus nearly $63 billion in Apple shares? (That assumes Berkshire decides to liquidate the position.)
A company with that big an investable capital will need time. Time to decide what to do. More time to execute plan.
Buffett himself prefers friendly, relatively mid-sized deals. It spent $13.6 billion buy Pilot Flying J, the parent of Pilot Travel centers, but it did involve some litigation at the end.
But to be meaningful to Berkshire’s bottom line would require a string of acquisitions.
The Wall Street Journal suggested maybe buying what Berkshire Hathaway doesn’t own in American Express (AXP) or Coca-Cola and taking the company private. Berkshire owns 21.5% of American Express and 9.3% of Coca-Cola.
Or perhaps Occidental Petroleum (OXY) .
Berkshire has a 28% stake in Oxy, but the company’s prospects are tied to the price of oil, which oil business is dependent on global oil prices. Crude oil is off about 10% in 2025 and 49% from its 2022 peak of $123.70 a barrel.
Or, maybe buy a big bank.
Or maybe Buffett will leave it to his designated successor, Greg Abel, to decide.
He’s allowed.
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