Warren Buffett is one of the greatest investors in history. He spent over 70 years publicly managing money, including 60 years at the helm of Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB). But the last three years before he retired were marked by behavior that many investors couldn’t help but notice.
In each of Buffett’s last 13 quarters in charge of Berkshire’s massive equity portfolio, he sold more stock than he bought. The result was a massive increase in cash, which climbed from $129 billion at the end of 2022 to $373 billion by the time Buffett left. The selling behavior had a clear implication: Most stocks that held Buffett’s interest were expensive.
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Newly installed CEO Greg Abel continued selling stock during the first quarter of 2026, but a few big purchases may have ended the streak. Buffett is still advising Abel on investments, and investors may be wondering whether the shift toward buying more is a sign that he finally sees opportunities in this market.
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What is Greg Abel buying and selling?
Abel and co-manager Ted Weschler bought almost $16 billion of marketable equities in the first quarter. That’s nearly as much as Buffett spent on equities in all of last year. To be sure, the departure of Todd Combs at the end of last year and Weschler taking over a larger portion of the portfolio likely led to more buying and selling than in a usual quarter. But the increase may also indicate that Abel sees more opportunities in today’s market.
That said, Berkshire sold over $24 billion worth of equities last quarter as well. As mentioned, that likely includes selling off a large amount of Combs’ investments.
Readers may look at those numbers and note that the amount of equities sold last quarter still exceeds the amount purchased. However, Berkshire also purchased OxyChem from Occidental Petroleum last quarter for $9.7 billion. That’s noted in a line item on Berkshire’s cash flow statement called “Acquisitions of businesses, net of cash acquired.”
That line item is typically only included in Berkshire’s annual reports. The inclusion in last quarter’s report seems intentional, as if to signal to investors that Berkshire is indeed deploying capital for shareholders. And when you add the OxyChem purchase to Berkshire’s other stock purchases, it outweighs the equity sales last quarter.
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In other words, Berkshire Hathaway spent more money buying businesses or pieces of businesses last quarter than it received from selling them for the first time since 2022.
Is it time to start buying stocks?
The significant amount of capital deployed in stocks may be a good signal that there are opportunities for investors in the current market. While not everyone can push a massive company to spin off a valuable piece of its business to invest a huge chunk of capital, investors looking for value in today’s market can still find it.
Those opportunities are few and far between, though. Buffett recently said, “It isn’t our ideal … environment, I should say, in terms of deploying cash for Berkshire,” in an interview at the annual shareholder meeting.
The feeling that much of Berkshire’s marketable equity portfolio may be overvalued is further echoed in Abel’s share repurchase behavior. After announcing the resumption of Berkshire’s share repurchase program in March, Abel bought back a mere $238 million worth of stock. That’s despite the stock dropping to a price-to-book ratio it hasn’t seen in over two years. In other words, Abel might not think the book value of the company’s equity portfolio (i.e., the market prices) is an accurate reflection of their true value.
If he continues to hold that position, Abel and Weschler could resume selling more stocks than they buy in future quarters.
Still, it’s important to understand the constraints that can prevent Berkshire from buying every opportunity the market presents. First and foremost, Berkshire has hundreds of billions of dollars in cash to deploy. It wants to invest billions at a time. Most investors aren’t making market-moving purchases.
Second, Buffett admits he doesn’t follow a large swath of companies, particularly tech companies, because he doesn’t understand them as well as his competitors do. Abel may be similarly inclined to focus on the businesses he understands best. There may be great opportunities in Berkshire’s blind spots.
So, while Buffett and Abel seem to think it’s still not a great opportunity to buy stocks, investors willing to do the work, research companies, and develop an expertise can still find great value. After all, Abel did deploy billions in capital last quarter. You could probably find a way to deploy a few hundred dollars.
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Adam Levy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.
Warren Buffett’s Successor Greg Abel Just Broke This 13-Quarter Streak at Berkshire Hathaway. Could This Be a Turning Point for the Stock Market? was originally published by The Motley Fool
