A recent article in Barron’s ponders what it takes for longtime Berkshire Hathaway CEO Warren Buffett to buy stocks.
Even a major selloff in the stock market might not be enough, the article notes, adding that for several quarters, Buffett hasn’t seen the value in stocks. Berkshire’s most recent regulatory filing showed no notable changes, and while the conglomerate pared stakes in 3 drugmakers—AbbVie, Bristol Myers Squibb, and Merck—it also reduced its General Motors holdings, added to its stake in Kroger, and made no changes to its largest holding, Apple.
But that inactivity hasn’t hurt Berkshire’s stock, the article contends. Both class A and B shares are up 25% this year, and investors are invigorated about Berkshire’s position in a recovering US economy.
Despite Buffett’s famous statement that his favorite holding period is forever, he hasn’t shown much patience with newer equity holdings. The article reminds us that Buffett notably made use of a confidential filing with the SEC to buy a stake in Chevron, only to cut it in half this year.
Berkshire is currently sitting on $144 billion in cash and equivalents, and at the annual shareholders meeting in May, Buffett told shareholders he’s ready to invest. Whether he’ll do so in time for his 91st birthday later this month is an open question.
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