Once again, Warren Buffett (Trades, Portfolio) looks ahead of the game.
After facing criticism in 2024 for aggressively selling stocks while markets soared, the Berkshire Hathaway (BRK.A, Financial) chairman is now being praised for his well-timed exit as U.S. equities head toward a bear market.
A Contrarian Move That Paid Off
While the S&P 500 posted back-to-back 20%+ gains in 2023 and 2024, Buffett trimmed his equity holdings for nine consecutive quarters, leaving Berkshire with a record $334 billion in cash by year-end. At the time, skeptics questioned his reluctance to reinvest, but now, as markets tumble, that caution looks remarkably prescient.
Big Bets on Cash Over Stocks
Buffett cut his stake in Apple (AAPL, Financial) from 49% to 23% of Berkshire's portfolio and also reduced his holdings in Bank of America (BAC, Financial). The move aligns with his famous advice: “Be fearful when others are greedy, and greedy when others are fearful.”
With the S&P 500 down 10% and the Nasdaq Composite off 13% in the last month, hedge fund managers and retail investors alike are calling it a perfectly timed cash-out.
Hedge fund manager Anurag Singh noted that Buffett's decision to hold nearly $325 billion in cash, about 50% of Berkshire's portfolio, now “makes sense after all.”
Meanwhile, Buffett's 2008 op-ed, “Buy American. I Am.”—originally published during the Great Recession—is going viral as investors wonder if history is repeating itself.
