In investing, you can't be scared when others are scared

Berkshire Hathaway Narrows Gap with S&P 500 as AI Concerns Shift Investor Focus

Think of investing like planting a garden. Sometimes, storms (like AI worries) hit the market and scare people. But while others are running for cover, some investors—like Warren Buffett—use this time to check on their crops and decide what to plant next. This is why keeping an eye on what Buffett and Berkshire Hathaway are doing matters for anyone with money in the market.

Berkshire’s Stock Rises While Wall Street Worries

While many investors are nervous about artificial intelligence (AI) shaking up the market, Berkshire Hathaway’s stock has been quietly growing. In fact, its shares have recently closed the performance gap with the S&P 500 from 12.2 percentage points down to just 4.3.

Berkshire’s businesses are doing well. Operating profits jumped 34% in the last quarter, with insurance profits up by a whopping 200%. Despite this, Warren Buffett isn’t buying back his own company’s stock, showing he doesn’t think it’s a bargain right now. Instead, Berkshire is holding onto a record $381.7 billion in cash.

Buffett’s Next Big Message

Warren Buffett might be getting ready to say goodbye as CEO of Berkshire Hathaway. The company has announced that Buffett will make a special statement soon, likely about giving to charity and his plans for the future. He’ll stay as chairman, but after this year, Greg Abel will take over as CEO and write the annual letter to shareholders.

Changes in Big Stock Holdings

Investors should know that Berkshire is quietly selling some of its biggest stock positions. It looks like the company sold more Apple and Bank of America shares in the last quarter. Even though Apple is still Berkshire’s largest holding (worth $75.2 billion), Buffett has cut his Apple shares by 69% over two years. The company’s stake in Bank of America has dropped by 40% since last year.

  • Berkshire may have sold about 35 million Apple shares for $8 billion.
  • Bank of America is still a top holding, but the position keeps shrinking.
  • These moves show that even Buffett trims winners to lock in profits.

According to a Barron’s analysis, the company has been using gains from Apple to strengthen its cash pile.

Buying More in Japan

While selling some U.S. stocks, Berkshire is buying more shares in Japanese companies. The total value of these Japanese holdings is now close to $33 billion. Buffett is using loans in Japanese yen to make these investments, a smart move while interest rates are low there.

  • All five Japanese stocks Berkshire owns are at or near record highs.
  • This shows Buffett’s team is looking for value outside the U.S.
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It’s not the first time Berkshire has looked abroad—studies show that adding international stocks can reduce risk and boost returns over the long term (source).

Buffett Warns About Fake Videos and AI Scams

Buffett is also warning people about fake videos online that use AI to make it look like he’s saying things he never said. He’s worried these videos could trick people, especially those who don’t know him well. At Berkshire’s annual meeting, he even said that AI might make scamming easier than ever before.

Bulls vs. Bears: What Investors Should Know

  • Bulls: Berkshire’s strong profits, smart moves in Japan, and a huge cash reserve mean it’s ready for opportunities. The company’s careful approach can be a safe spot when the market is shaky.
  • Bears: Buffett is selling big winners like Apple and Bank of America, which could mean he sees less upside ahead. Not buying back stock suggests he thinks shares are fairly priced, not cheap. AI risks and fake news could also make markets more volatile.

Investor Takeaway

  • Don’t panic when others are worried—look for the facts behind the headlines.
  • Watch Berkshire’s cash: Big moves may be coming, so keep an eye on new investments.
  • Diversify your portfolio. Buffett is buying in Japan—think about global stocks for your mix.
  • Be careful online. Double-check any “Buffett” advice you see on social media or YouTube.
  • Remember: Even the best investors sometimes trim their winners to keep their gardens healthy.

For the full original report, see CNBC

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