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Berkshire Hathaway (BRK.B) sold $12.5B in stock last quarter and increased its cash position from $100B to $373B (30% of assets). Apple’s (AAPL) stake is down from $200B to $50B. Bank of America’s ( BAC ) position declined significantly.
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Buffett has been a net seller for 13 consecutive quarters, the longest streak of his career, because he’s not worth buying at current prices.
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An analyst named NVIDIA just named his top 10 AI stocks in 2010. Get it for free here.
Warren Buffett has been a net seller of stocks for 13 consecutive quarters, which equates to more than three straight years of selling more than he bought, the longest such streak of his entire career. Meanwhile, Berkshire Hathaway ( NYSE:BRK.B ) has picked up large positions in Apple ( NASDAQ:AAPL ) , Bank of America ( NYSE:BAC ) and several other long-term favorites, which has allowed its cash position to grow from $100 billion to nearly $373 billion. For a man who has famously said that his favorite holding period is “forever,” the decision to methodically sell off core positions even as the market reaches new highs is a bullish signal.
It should go without saying that Buffett has never been an investor to fear and has built his reputation by staying invested during every crisis the economy has seen over the past six decades. He bought during the 2008 financial crisis, held through COVID, and has always preached that trying to time the market is a fool’s errand. So, when Buffett starts raking in cash at a pace that dwarfs anything in Berkshire’s history, the move deserves attention. To be clear, he is not predicting a crash, but he is saying, through this cash hoarding process, that he is not finding enough things to buy at today’s prices.
For everyday investors, this is very interesting, but for retirees, it’s a different conversation entirely. Retirees don’t have decades to recover from the recession, and they don’t have future wages to dollar-cost average for the recovery. When Buffett, arguably the sickest investor alive, decides that the risk-reward in equities isn’t worth it right now, the people who can least afford to be wrong should pay close attention.
READ: The analyst named NVIDIA in 2010 Just naming his top 10 AI stocks
Berkshire’s cash and short-term treasury positions now represent more than 30% of the company’s total assets, the highest allocation in at least three decades. Apple’s stake, once worth nearly $200 billion, has dwindled to nearly $50 billion. Bank of America, Buffett’s position for years, has declined significantly.
In the last quarter alone, Berkshire sold $12.5 billion in stock while buying virtually nothing, and yet, the new company’s CEO Greg Abel has resumed buying Berkshire shares in a move that suggests management finally sees its stock as cheap enough to invest. This ends a long period that previously suggested a lack of significant investment opportunities.
The historical pattern here is something that should catch the eye of the retiree, as in 2005, Berkshire allowed its company’s cash position to rise to 25% of assets while the housing bubble deflated, a few years before the financial crisis. In 2021, cash allocations reached near-record levels before the market rallied and fell 20% in 2022. To be fair, Buffett didn’t predict a crash, but both times, his refusal to invest at high valuations meant that Berkshire had dry powder that everyone else was selling at lows.
The difference between Buffett’s status and retirement is significant, as Berkshire generates billions in cash each quarter. This is a company that can sit on $373 billion or more, and wait years for the right opportunity.
A retiree with $500,000 or $1 million in a portfolio doesn’t have that kind of waiting period, because they need the income now, and they can’t be completely cashless while earning 3.6% while inflation runs at 2.4% until January 2026. However, the main message is that if the discipline finds value in the current history of the discipline. prices, retirees may want to think twice before investing in the most expensive corners of the market.
To be clear, this does not mean sell everything and go cash, but it does mean that the retiree should take a good look at what is overvalued and reduce any positions that have drifted away from their fundamentals, so that any portfolio survives the downturn rather than hoping for it. This is exactly the kind of danger that the whole concept of “return order” warns against.
It’s important to understand that Buffett’s playbook on Berkshire’s scale does not translate directly to a retiree’s individual portfolio, but the principles do. First, retirees should assess how much of their portfolio is concentrated in expensive sectors. If you are overweight in technology or AI-related stocks trading at 30-50 times earnings, Buffett is telling you through his actions that the risk reward is inappropriate.
This does not mean that these companies are bad businesses, but it does mean that the price you pay for future growth leaves a very small margin of safety if anything goes wrong. Second, it also means that cash should not be a dirty word in 2026, as short-term Treasuries and money market funds still pay between 3.5% and 4%, which is a meaningful return with zero equity risk.
If you’re a retiree who keeps six to twelve months of living expenses in cash and near cash, you’re creating the same opportunity that Buffett created at Berkshire before he stepped down as CEO. The ability to deploy capital when prices are not attractive rather than being forced to sell when they are not. Third, you also have an environment where dividend-paying stocks with reasonable valuations are holding their own and companies with low payout ratios, strong free cash flow, and decades of dividend growth are exactly the kinds of businesses that Buffett has always liked, and they want to hold out very well from the broader market during a correction.
Most importantly, no one knows what the market will do next year, but when one of the most successful investors of the last century decides to make the best use of his company’s $373 billion in cash and wait, retirees should ask themselves if their portfolios are built for what’s to come.
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