Greg Abel, the new chief executive of Berkshire Hathaway, has made a significant early statement by turning the company into a net buyer of stocks for the first time in 15 quarters.
Berkshire Hathaway spent 14 consecutive quarters as a net seller of equities, a streak that extended through the final years of Warren Buffett’s tenure as CEO and into the first quarter of this year under Abel.
That streak ended decisively in the second quarter, with Berkshire Hathaway recording almost $20 billion in stock purchases, marking the first net buying quarter since 2022.
Among the most notable moves was a significant increase to Berkshire’s Alphabet position, with class A shares lifted by 45% and class C shares rising by more than 600%.
Alphabet class A stock has now climbed to become Berkshire Hathaway’s fourth-biggest holding, sitting behind longtime favorite Coca-Cola and other major positions in the portfolio.
Buffett handed the CEO role to Abel at the start of this year but remains chairman of the company, meaning his influence and philosophy still carry weight over broader investment thinking.
Buffett’s own words from his 2024 shareholder letter help explain the long period of net selling: “Often, nothing looks compelling; very infrequently we find ourselves knee-deep in opportunities.”
The last time Berkshire Hathaway was a net buyer of stocks, in the third quarter of 2022, the S&P 500 went on to climb sharply, with that bull market continuing through the present day.
Some investors may read Abel’s buying spree as a similar signal, but current market conditions differ considerably from those that existed when Buffett last turned to buying in size.
The S&P 500 Shiller CAPE ratio, which measures inflation-adjusted stock prices relative to earnings per share, shows that equities have reached one of their most expensive levels on record, with the last comparable valuation seen during the dot-com bubble of 2000.
In 2022, the Federal Reserve was actively raising interest rates to combat inflation, whereas today inflation is rising again amid President Donald Trump’s tariffs on imports and the ongoing conflict in Iran, with the Fed yet to respond with rate moves.
That combination of stretched valuations and macroeconomic uncertainty introduces a level of risk that was not present in the same way during Berkshire’s previous net-buying phase.
Taken together, these factors suggest that stocks are less likely to replicate the sharp gains seen after 2022, even if the market has not yet shown signs of an imminent reversal.
Analysts and long-term investors will be watching closely to see whether Abel continues buying aggressively in the coming quarters, or whether rising uncertainty prompts a more cautious approach.
For individual investors, the episode underscores the enduring importance of focusing on quality holdings and maintaining a long-term perspective, regardless of where the broader market heads next.
