(This is the Warren Buffett Watch newsletter, news and analysis on all things Warren Buffett and Berkshire Hathaway. You can sign up here to receive it every Friday evening in your inbox.)
Berkshire shares shake the Buffett blues with new all-time highsAfter almost 18 months, Berkshire Hathaway shares have entirely erased all the ground they lost in the wake of Warren Buffett's surprise announcement at the 2025 shareholders meeting that he would step down as CEO at the end of that year.
On Friday, May 2, 2025, the Class A shares closed at $809,350. The Class B shares finished at $539.80.
Both were record-high closes.
The meeting was the following day, Saturday, May 3.
On Monday, May 5, BRK.A dropped 4.9% and BRK.B lost 5.1%.
CNBC.com noted a 14% drop in Q1 operating earnings, also announced that Saturday, may have contributed to the declines.
It also relayed some reassurance from analysts like Brian Meredith at UBS who predicted the company's culture and strategy would "remain unchanged" under new CEO Greg Abel.
"Buffett leaves a company that is less reliant on his investing capabilities, with an array of leading businesses with strong cash flows."
Investors, however, were apparently not reassured.
As the stock fell, there were fears a "Buffett premium" was evaporating.
Three months later, at their lowest closes of the year, BRK.A had lost 14.3% of its value and the more widely held B shares were down almost 15%.
Since then, they've rallied by 18%, and on Tuesday this week both classes topped their pre-announcement levels to set fresh all-time closing highs.
They were higher still on Thursday, setting new closing highs of $820,500 and $546.97.
Friday they lost almost 1% but remain roughly one-half of a percentage point above their highs just before the 2025 meeting.
Berkshire's gains have reduced its year-to-date deficit against the benchmark S&P to less than four percentage points.
October sprintInvestors have been rotating out of high-flying tech and AI stocks in recent weeks amid growing concerns their massive spending on computing infrastructure won't produce the sustained profits they envision.
Berkshire, by contrast, is "the ultimate anti-AI play," according to a Barron's headline this week.
"With more than $350 billion in cash and equivalents on its balance sheet and close to $50 billion of annual after-tax earnings from a diverse group of businesses, Berkshire arguably is the most defensive megacap stock in the market."
And on CNBC's "Morning Call" Monday morning, Adam Patti of VistaShares, which runs an ETF that tracks Berkshire's portfolio, said the market's turn away from its long-running "momentum-driven frenzy" comes at a good time.
"The market spent a year pricing Berkshire without Buffett. I think it's finally decided Abel can, in fact, run it" and likes that he's taking advantage of the company's cash.
"Berkshire is a coiled spring. When it comes back, it comes back fast and furious."
watch now
BUFFETT & BERKSHIRE AROUND THE INTERNETSome links may require a subscription:
Reuters: Judge approves defunct talc supplier's $535 million settlement with Berkshire affiliateHousingWire: Taylor Morrison CEO on the value of trust in a challenging marketBarron's on MSN: Warren Buffett should emulate Elon Musk and give Berkshire stock to America's kidsBenzinga: Warren Buffett's Investment Power — or Donald Trump's Control of a Room: Bill Ackman Picks Which He Would Rather HaveBarron's on MSN: Meta eyes an early equity deal for its AI war chest—and Berkshire could be a buyerZacks on Yahoo Finance: Berkshire Hathaway B (BRK.B) Increases Despite Market Slip: Here's What You Need to KnowParade: Warren Buffett's sister Doris Buffett has donated $200 million of her own money to strangers since founding the Sunshine Lady Foundation in 1996HIGHLIGHTS FROM CNBC'S BUFFETT ARCHIVEBerkshire's hidden multi-billion-dollar mistakes (2001)watch now
AUDIENCE MEMBER: Mr. Munger, I know you're fond of evoking humility to promote rational thought. So my question is, what's the most recent business mistake that you've made, Mr. Munger, and why did it occur? (Laughter)
WARREN BUFFETT: I'm going to take notes on this one. (Laughter)
CHARLIE MUNGER: The mistakes that have been most extreme in Berkshire's history are mistakes of omission. They don't show up in our figures. They show up in opportunity costs.
In other words, we have opportunities, we almost do it. In retrospect, we can tell that we were very much mistaken not to do it.
In terms of the shareholders, those are the ones in our history that it really cost the most. And very few managements do much thinking or talking about opportunity costs.
But Warren, we have blown —
WARREN BUFFETT: Billions and billions and billions. I might as well say it. (Laughter)
CHARLIE MUNGER: Right, right. And we keep doing it. (Laughter)
WARREN BUFFETT: Some might say we're getting better at it. (Laughter)
CHARLIE MUNGER: I don't like mentioning the specific companies, because the — you know, we may, in due course, want to buy them again and have an opportunity to do so at our price.
But practically everywhere in life, and in corporate life, too, what really costs, in comparison with what easily might have been, are the blown opportunities. I mean, it just — it's an awesome amount of money...
WARREN BUFFETT: I might add that when we speak of errors of omission, of which we've had plenty, and some very big ones, we don't mean not buying some stock where we — a friend runs it, or we know the name and it went from one to 100. That doesn't mean anything. It's only —
We only regard errors as being things that are within our circle of competence.
So if somebody knows how to make money in cocoa beans, or they know how to make money in a software company or anything, and we miss that, that is not an error, as far as we're concerned.
What's an error is when it's something we understand, and we stand there and stare at it, and we don't do anything.
Or worse yet, what really gets me is when we do something very small with it. We do an eyedropper's worth of it, when we could do it very big.
Charlie refers to that elegantly when I do that sort of thing as when I'm sucking my thumb. (Laughter)
And there really — I mean, we have been thumbsuckers at times with businesses that we understood well.
And it may have been because we started buying, and the price moved up a little, and we waited around hoping we would get more at the price we originally started — there could be a lot of things.
But those are huge mistakes. Conventional accounting, of course, does not pick those up at all. But they're in our scorebook.
Berkshire Cash as of June 30: $365.5 billion (Down 8.0% from March 31)
Excluding Rail Cash and Subtracting T-Bills Payable: $359.2 billion (Down 3.8% from March 31)
Berkshire repurchased $4.5 billion of its shares in Q2 2026.
BERKSHIRE'S TOP EQUITY HOLDINGS - Oct. 23, 2026Berkshire's top holdings of disclosed publicly traded stocks in the U.S. and Japan, by market value, based on the latest closing prices.
Holdings are as of June 30, 2026, as reported in Berkshire Hathaway's 13F filing on August 14, 2026, except for:
Mitsubishi, which is as of April 30, 2026The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.
QUESTIONS OR COMMENTSPlease send any questions or comments about the newsletter to me at [email protected]. (Sorry, but we don't forward questions or comments to Buffett himself.)
If you aren't already subscribed to this newsletter, you can sign up here.
Also, Buffett's annual letters to shareholders are highly recommended reading. There are collected here on Berkshire's website.
Berkshire Hathaway has rallied as investors rotate out of technology and other AI plays into defensive groups like consumer stocks, real estate, and utilities.
This has been a year of immense change for Berkshire Hathaway (BRKA +1.13%)(BRKB +1.48%) and its investors. After more than half a century at the helm, the iconic Warren Buffett retired as CEO on Dec. 31, paving the way for Greg Abel to take over.
It took Abel mere months to completely reshape Berkshire's $364 billion portfolio. He dumped 16 stocks in the first quarter and has brought a tech focus to the company's investment portfolio that hadn't existed under the Oracle of Omaha. Today, three unstoppable artificial intelligence (AI) stocks account for roughly 32% ($115.7 billion) of Berkshire's portfolio: Apple (AAPL +1.23%), Alphabet (GOOGL -3.15%)(GOOG -3.08%), and Bending Spoons (BSP +3.54%).
Warren Buffett's Dec. 31 retirement turned the proverbial keys over to Greg Abel. Image source: Getty Images.
Apple: $78.28 billion (21.5% of invested assets)For the better part of the last decade, Apple has been Berkshire's top holding by market value. Warren Buffett piled into Apple because he appreciated the brand's loyal customer base and favored the company's market-leading share buyback program.
But Apple is in the midst of a multi-year transformation that emphasizes higher-margin subscription services and AI. Prior to his own recent retirement as CEO, Tim Cook shifted Apple's focus to services designed to enhance existing customer loyalty and bolster margins. Double-digit sales growth in the company's services segment should lessen the revenue peaks and valleys commonly seen with major iPhone upgrade cycles.
AAPL Apple$348.22+$4.23 (+1.23%)
NASDAQ · As of 4:00 PM ET 10/22/26
There's also Apple Intelligence, which is the company's generative AI built directly into its operating systems. Embracing these tools should make its physical devices (iPhone, Mac, and iPad) considerably more attractive.
Perhaps the biggest change in the wake of Buffett's retirement has been Abel's aggressive purchases of Google parent Alphabet. Though Buffett initiated this position before his retirement, Abel more than tripled it in the first quarter and purchased around $17 billion in additional stock in the second quarter.
GOOGL Alphabet$324.22-$10.54 (-3.15%)
NASDAQ · As of 4:00 PM ET 10/22/26
Alphabet possesses the sustainable moat that Berkshire's current and former bosses often seek out. In September, Google accounted for 90% of global internet search traffic. Maintaining a virtual monopoly in internet search affords the company exceptional ad-pricing power.
But it's Alphabet's AI ambitions that are really turning heads. Since Alphabet began integrating generative AI and large language model capabilities into Google Cloud, sales for this significantly higher-margin operating segment have soared. In the June-ended quarter, Google Cloud's year-over-year revenue growth accelerated to 82%!
Image source: Getty Images.
Bending Spoons: $1.44 billion (0.4% of invested assets)The third unstoppable AI stock that, alongside Apple and Alphabet, collectively makes up 32% of Berkshire Hathaway's $364 billion investment portfolio is the Italian-based tech- and AI-focused acquisition company Bending Spoons.
Last week, Berkshire Hathaway worked out a deal to acquire an additional 10 million shares of Bending Spoons via a private placement at $33 per share. This comes atop Berkshire's initial investment at the company's July initial public offering.
BSP Bending Spoons S.p.A.$45.69+$1.56 (+3.54%)
NASDAQ · As of 4:00 PM ET 10/22/26
Bending Spoons has acquired several mature tech and digital businesses, including AOL and Vimeo. It develops software and relies on AI, among other factors, to make these businesses more efficient and generate sustainable subscription sales. It's a relatively low-cost/high-margin operating model that's now well-funded, thanks in part to Warren Buffett's successor.
Shares of Berkshire Hathaway Inc (NYSE:BRK) (NYSE:BRK) hit an all-time high on Wednesday, which may come as a surprise to those expecting lower returns after Warren Buffett stepped down as CEO and chairman of the conglomerate.
Berkshire Hathaway just clawed back to a record high, but the force driving it there has little to do with Warren Buffett's legacy and everything to do with a rotation that could reverse just as fast as it arrived.
Berkshire Hathaway (NYSE:BRK-B | BRK-B Price Prediction) Class B shares closed at a record $539.82 on Tuesday, October 20, 2026, after a 1.43% gain. The old high was the $539.80 close on May 2, 2025, set the Friday before Warren Buffett told shareholders he would hand over the CEO job, so the new record beat it by just two cents.
Getting back there took 17 months. Over that time, the S&P 500 gained more than 35% while Berkshire stayed below its old high.
On October 21, both share classes set intraday records, with Class B reaching $543.34. Class B then closed at the day’s low of $538.99, down 0.15%, which left it slightly below the October 20 record close.
Berkshire’s market value at that close was about $1.16 trillion. Most of the push to the record came from investors pulling money out of AI stocks, and that rotation will likely determine how long the record holds.
Money Leaving AI Stocks Landed in Berkshire The S&P 500 set a record on October 6 and has slipped since then, while Berkshire gained about 7%. From October 6 through October 20, the iShares Semiconductor ETF (NASDAQ:SOXX) fell in 10 of 11 sessions and lost 15.17%, while Berkshire rose in nine.
That run included a 10-day winning streak, Berkshire’s first since 2018. Investors pulling out of crowded chip trades looked for profits that hold up whether AI spending does, and Berkshire offers that through its insurance, BNSF railroad, utility and consumer businesses, plus a large cash cushion.
Abel Is Putting the Cash to Work In the second quarter, Berkshire bought back $4.5 billion of its own stock and put $23.5 billion into other stocks, including $10 billion in Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOGL). That ended 14 straight quarters of net stock selling, and cash fell to $364.7 billion from a record $380.2 billion.
Buybacks matter because they show management thinks the shares trade below intrinsic value, meaning the company’s underlying worth. Operating profit rose 16% to $12.98 billion, a quarter KBW analyst Meyer Shields called “very solid.”
Buffett already did the stock-picking work for a lifetime, and the cheapest dividend payers still sitting inside Berkshire’s own book are worth a look (we ranked the seven cheapest in a free guide here: 7 Warren Buffett Stocks to Buy Now).
Succession Doubts Are Fading On September 18, 2026, Buffett, then 96, stepped down as chairman and became chairman emeritus. His son Howard Buffett, a board member since 1993, became non-executive chairman; Buffett stayed on as a director, and he wrote that “Howard will guard its culture and values.”
The stock hit its low about two weeks after the chairman change was announced. Investors wanted proof that Berkshire runs well without Buffett at the top, and rising profits plus buybacks under Abel, CEO since the start of 2026, gave them that proof.
What Could Stall the Rally If AI stocks bounce back, the money that moved into Berkshire could move right back out. The chip ETF rose 2.07% on October 21, the same day Berkshire slipped from its intraday high.
Traders are treating $540 as the key technical level heading into earnings, and Berkshire closed just under it. The upcoming third-quarter report will show whether operating earnings can match the $13.48 billion from the same quarter a year earlier. A record price also gives you less margin of safety than the stock offered while it fell behind.
Should You Buy or Sell BRK-B Stock At a P/E of 11x and a price-to-book of 1.06, Berkshire is modestly priced for a company with rising operating profit and a CEO buying back its shares. Index funds still lean hard on the same AI trade that is now reversing, so they carry more exposure if chip stocks keep falling. Berkshire’s mix of businesses has less direct exposure to that trade.
This view holds if Class B closes above $540 after the third-quarter report and operating earnings come in at or above $13.48 billion. If earnings fall short and the chip ETF wins back its October losses, the rotation is reversing, and the record likely won’t last.
Contact [email protected] for any questions or corrections.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
There haven't been many drastic changes to Berkshire Hathaway since Warren Buffett stepped down as CEO and was replaced by Greg Abel. The investment conglomerate returned to buying back its own shares for the first time since 2024, but the company's approach to its subsidiaries remains largely unchanged. There also haven't been many big shifts in the company's portfolio of publicly traded stocks -- with one notable exception.
Berkshire began buying Alphabet (GOOG -0.81%) (GOOGL -0.85%) while Buffett was still CEO, and the company has dramatically increased its holdings in the tech giant under Abel. As of this writing, Alphabet stock (when combining Class A and Class C holdings) accounts for roughly 12.6% of Berkshire's portfolio and stands as its third-largest position. The tech leader's dominant position in a key market could help explain why Berkshire is betting big on the stock.
Image source: Getty Images.
Alphabet dominates a key market Alphabet's Google continues to dominate the search engine market, commanding roughly 90% market share. This strength has been the foundation that has allowed the company to build a leading digital advertising business. The company also generates ad revenue through its YouTube service and its Google Network advertising suite.
Alphabet's strengths have made it the top dog in the digital advertising market for well over a decade, but a change could be on the horizon. According to a report from eMarketer, Meta Platforms is on track to become the top digital ads company by revenue -- with a market share of 26.8% this year. Meanwhile, Alphabet is projected to come in at second with a market share of 26.4%, and Amazon is expected to be third with a share of 9%.
GOOGL Alphabet$341.26-$2.92 (-0.85%)
NASDAQ · As of 1:18 PM ET 10/20/26
But while Alphabet could be on track to cede the top spot in the digital ads market to Meta this year, Berkshire probably isn't sweating it too much. For starters, Alphabet's ads business is still projected to grow roughly 12% in 2026, according to eMarketer's estimate. Digital ads remain the company's biggest revenue source, and solid growth in the category suggests little reason for concern, but Alphabet's business has also been substantially diversified.
In particular, the company's Google Cloud segment has emerged as a powerful growth driver. Sales in the category increased 82% year over year to reach $24.8 billion in the second quarter, and it's likely that the unit will continue to see very strong expansion in line with trends connected to artificial intelligence.
Alphabet looks poised to retain its dominant position in search, remain a leader in the digital ads market, and record explosive growth with its Google Cloud business. With these dynamics in mind, it wouldn't be surprising to see Berkshire buy more of the company's stock at some point.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Berkshire Hathaway, and Meta Platforms. The Motley Fool has a disclosure policy.
Berkshire Hathaway B (BRK.B - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Shares of this company have returned +6% over the past month versus the Zacks S&P 500 composite's +0.7% change. The Zacks Insurance - Property and Casualty industry, to which Berkshire Hathaway B belongs, has gained 2.7% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Berkshire Hathaway B is expected to post earnings of $5.91 per share for the current quarter, representing a year-over-year change of -5.6%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
For the current fiscal year, the consensus earnings estimate of $21.83 points to a change of +5.9% from the prior year. Over the last 30 days, this estimate has changed +0.8%.
For the next fiscal year, the consensus earnings estimate of $22.1 indicates a change of +1.2% from what Berkshire Hathaway B is expected to report a year ago. Over the past month, the estimate has changed +0.1%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Berkshire Hathaway B.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For Berkshire Hathaway B, the consensus sales estimate for the current quarter of $97.3 billion indicates a year-over-year change of +2.5%. For the current and next fiscal years, $392.1 billion and $409.7 billion estimates indicate +5.6% and +4.5% changes, respectively.
Last Reported Results and Surprise HistoryBerkshire Hathaway B reported revenues of $101.81 billion in the last reported quarter, representing a year-over-year change of +10%. EPS of $6.02 for the same period compares with $5.17 a year ago.
Compared to the Zacks Consensus Estimate of $95.3 billion, the reported revenues represent a surprise of +6.83%. The EPS surprise was +14.89%.
Over the last four quarters, Berkshire Hathaway B surpassed consensus EPS estimates three times. The company topped consensus revenue estimates just once over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Berkshire Hathaway B is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Berkshire Hathaway B. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
Most investors know Berkshire Hathaway (BRKA +0.09%) (BRKB +0.04%) is a combination of a portfolio of publicly traded stocks and privately owned businesses like GEICO Insurance, Duracell batteries, and Shaw flooring. Is it possible, however, that investors are underestimating just how much cash the conglomerate is collecting from one of its most boring wholly owned companies? It certainly looks that way.
The business in question is the railroad BNSF, although you may know it better as Burlington Northern Santa Fe. Here's a closer look.
All aboard the cash train!
Contrary to a common assumption, Berkshire Hathaway isn't just a collection of companies that former CEO Warren Buffett and current CEO Greg Abel felt good about owning. Every one of its holdings serves a specific purpose. For instance, the vast majority of its privately held businesses are meant to generate reliable cash flow that backs up its insurance operation.
Berkshire also discloses surprisingly detailed information about these businesses. For instance, through the first half of 2026, BNSF has generated just over $2.9 billion in operating earnings, up nearly 10% year over year. That's more than one-tenth of the organization's total operating earnings -- again.
Although operating income is a key measure of a business's health, in this instance it's not necessarily the most meaningful one. Arguably more important to a conglomerate like Berkshire is how much cash an investment is reliably putting in its parent company's pockets, whether that investment is private or a publicly traded one.
To this end, as Greg Abel noted in his 2025 letter to Berkshire Hathaway shareholders, published early this year, $4.4 billion of BNSF's $8.1 billion in 2025 operating earnings was handed over to Berkshire in the form of a cash dividend. The railroad company is on pace to at least match these numbers again this year, extending a long-standing track record of real cash generation.
Image source: Getty Images.
The amazing part? Berkshire Hathaway paid only $34.5 billion for BNSF back in 2010. Now 16 years later, the effective dividend yield on this initial investment is a healthy 12.7%, not to mention the appreciation of the railroad's value in the meantime. Although Berkshire itself doesn't offer a specific figure, estimates of its market value range from $75 billion to as much as $200 billion, and Buffett has been willing to say the railroad is the conglomerate's second-most-valuable asset, mostly due to the cash it produces.
More private, less public?
It's just one piece of the Berkshire puzzle, of course, and a relatively small one at that; Berkshire's current market cap stands at a stunning $1.1 trillion.
It's an important detail, though, and an increasingly important one, particularly if the stock market itself decides to unwind its extreme valuation. Although a correction would put widespread bearish pressure on most stocks, since Berkshire Hathaway's value largely consists of privately held companies, its ticker could be well-shielded from any such weakness.
Given this, shareholders might wish Abel would make more outright acquisitions of small cash-cow companies rather than use Berkshire's $365.5 billion in uninvested cash to simply purchase more stocks. The private approach appears to create more long-term value.
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Warren Buffett isn't the CEO of Berkshire Hathaway (BRKA +0.09%)(BRKB +0.04%) , and he hasn't been since last year. Greg Abel took over at the start of 2026, but there have been reports of Buffett and Abel talking regularly and being in sync on discussions about investments.
For a while, it still felt like a Buffett-run business. But then, Berkshire announced a move that just seemed way out of left field. It acquired a stake in Bending Spoons. It's not involved in selling kitchen supplies, nor does it have anything to do with The Matrix. Those were my first two guesses.
I think either one would have been better than what the business is actually about: buying up software businesses (sometimes troubled ones), and trying to improve them or turn their business around, including AOL. This is not the type of business I would see Buffett investing in, and I think it shows that Berkshire's trajectory is changing course.
Image source: Getty Images.
It's not a relatively big position, but it is a notable oneBerkshire invested $600 million into the Milan-based company's IPO during the summer and has since added $330 million to its position.
Buffett hasn't historically been keen on acquisition-hungry companies in the past, and that's putting it lightly. Back in 2014, at Berkshire's annual meeting, the billionaire investor expressed skepticism about companies making acquisitions. "When we read that a company we don't control is going to make an acquisition, I'm much more inclined to cry than to smile."
Suffice to say, Bending Spoons is not the type of business I would expect Buffett to invest in. Not only is it taking on some considerable risk with brands of questionable value, but its earnings are by no means consistent and predictable, which is what Buffett often seeks when looking at long-term investments.
It's not a huge position in Berkshire's portfolio, accounting for just 0.4%, but I think it's a noteworthy one, and a potential sign of things to come, simply because it is so unusual for Berkshire.
BRKB Berkshire Hathaway$532.23+$0.21 (+0.04%)
NYSE · As of 4:00 PM ET 10/19/26
Should Berkshire investors be concerned?Investing in Bending Spoons isn't going to break Berkshire's portfolio or put its shareholders at significant risk. But I do believe it marks a turning point, with Abel appearing to be more willing to take on risk and invest in tech.
That's also why, however, I'd take more of a wait-and-see approach with Berkshire's stock these days, to take some time and see the types of companies that Abel is investing in, to determine whether the business is moving in the right direction. After this recent move, I'm not as sure anymore.
Adam Patti of VistaShares, which runs an ETF that tracks Berkshire Hathaway's portfolio, discusses how the Class B shares have recovered to trade near an all-time high.
Greg Abel has been CEO of Berkshire Hathaway for only about 10 months. But he's been at the company since 1999, so he's been able to learn from the Great Warren Buffett for decades.
While Buffett has always loved to buy value stocks trading at bargain prices, he learned from his right-hand man, Charlie Munger, who served as Berkshire's vice chair until his passing in 2023, that value doesn't always look like a beaten-down stock the market has abandoned.
He took this advice to heart. In a 1989 letter to shareholders, Buffett wrote: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price." The lesson seems to have stuck with Abel, too, who in recent months has plowed $930 million into a stock that embodies just that.
Image source: Getty Images.
Buying value in a seemingly legacy business
In July, Berkshire invested $600 million in Bending Spoons' (BSP +3.18%) initial public offering (IPO). Bending Spoons acquires or rolls up digital businesses, optimizes them, and then reinvests the earnings to buy more digital businesses.
Recently, another securities filing revealed that Berkshire has invested an additional $330 million, bringing its total stake in the company to about 4%.
Since Bending Spoons' inception in 2013, the company has acquired 50 businesses, including notable names like AOL, Eventbrite, and Vimeo, all three of which were acquired within the past two years. Results have been great. For the second quarter, Bending Spoons grew revenue 126% year over year to over $704 million. Diluted earnings per share surged 163% to $0.28. Adjusted operating margins were 54%.
While the company has taken on debt to fund acquisitions, Bending Spoons' net leverage ratio was 2.4x, which is manageable and not a cause for concern.
Another interesting thing about Bending Spoons is that while naysayers may view many of the companies it is purchasing as legacy technology or as companies that couldn't compete with peers, management is clearly bullish on the potential to layer artificial intelligence into these businesses.
BSP Bending Spoons S.p.A.$48.57+$1.50 (+3.18%)
NASDAQ · As of 10:00 AM ET 10/19/26
For instance, at one of Bending Spoons' companies, Brightcove, a cloud-based video platform, AI was used to enable auto-translations, audio-track dubbing, and live captions in over 50 languages.
Ultimately, Bending Spoons' strategy aligns closely with Buffett and Berkshire's value philosophy, in which they seek out businesses the market may have abandoned but that have solid underlying fundamentals and good stewards of capital who can unlock shareholder value.
Where the stock stands today and a good lesson for investors
Now, investors should understand that Berkshire bought shares at significantly more attractive levels than where the stock trades today. The company was priced at $29 per share in the IPO, and Berkshire's recent $330 million purchase was at $33 per share.
As of this writing, the stock trades at nearly $54.50 and has a market capitalization of nearly $35 billion. Even though revenue and profits are growing quite nicely, the stock now trades at nearly 39 times forward earnings and 11.6 times forward sales.
Whether that valuation is reasonable is debatable, but the stock is by no means a bargain right now. Still, it's a good business with strong long-term prospects, so investors can consider whether to start nibbling, practice dollar-cost averaging, or add it to their watch list and wait for better entry points.
Overall, I think Berkshire's purchase of Bending Spoons is a good lesson that Buffett, Munger, and now Abel have been teaching for decades. Just because a business isn't in the hottest sector or is an old name doesn't mean there isn't good value there.
It depends on management, how the business is run, and ultimately, the financials. Abel and his team saw a good opportunity and have already been rewarded. There's always value to be had in every market, regardless of the environment.
BOSTON & WARSAW, Poland & COLOGNE, Germany--(BUSINESS WIRE)--Berkshire Hathaway Specialty Insurance Announces Entry Into Poland, and Carsten Keune as Country Manager.
For the first time in well over half a century, Berkshire Hathaway (BRKA +1.08%)(BRKB +1.21%) entered the year in uncharted territory. On Dec. 31, Warren Buffett retired as CEO, paving the way for his protégé, Greg Abel, to oversee the company's day-to-day operations and its closely watched $363 billion investment portfolio.
Abel didn't waste much time making his mark. He disposed of 16 stocks in the first quarter and pared down six others, including one of the Oracle of Omaha's core holdings, Bank of America (BAC -0.91%)(also known as BofA).
Warren Buffett has officially passed the baton to Greg Abel. Image source: Getty Images.
In the six quarters leading up to Buffett's retirement, he was a persistent seller of BofA stock. This pattern has continued through Abel's first two quarters as CEO, with Buffett and Abel collectively selling more than 549 million shares since July 2024, or 53% of what had been a 1.03-billion-share position.
The writing looked to be on the wall that Bank of America would get the heave-ho -- but that may not be the case any longer.
Buffett and Abel collectively sold over 549 million shares of Bank of AmericaAs recently as a few months ago, there were three reasons to believe that BofA's time as a prominent Berkshire Hathaway holding would come to an end.
BAC Bank of America$51.23-$0.47 (-0.91%)
NYSE · As of 4:00 PM ET 10/16/26
Firstly, Buffett and Abel have always been sticklers for value. When the Oracle of Omaha first invested in BofA's preferred stock in August 2011, its common stock was trading at a 62% discount to book value. As recently as August, BofA peaked at a 65% premium to book value.
Secondly, Bank of America is the most interest-sensitive of the country's money-center banks. With the Federal Reserve lowering rates six times between September 2024 and December 2025, no large bank was at greater risk of its net interest income shrinking than BofA.
Third and finally, Greg Abel's first annual letter to shareholders excluded Bank of America in his discussion of companies that can compound over multiple decades.
The writing looked to be on the wall that Bank of America would soon get the heave-ho.
Image source: Getty Images.
Greg Abel's tune on Bank of America may have changedWhile additional selling is possible, several catalysts that had made Bank of America stock less attractive have reversed course.
For example, Bank of America's ongoing profitability and prudent lending have allowed its book value per share to steadily rise. When coupled with the recent pullback in BofA's share price, the company's stock is now trading at only a 30% premium to book value following its third-quarter operating results. BofA may not be a screaming bargain like it was in August 2011, but it remains attractive at just a 30% premium to book.
BAC Price to Book Value data by YCharts.
Additionally, the central bank kicked off only its fourth rate-hiking cycle of the century on Sept. 16. According to the CME Group's (CME +1.52%) FedWatch Tool, the odds are incredibly high that the Fed will implement several rate hikes over the next year. As the most interest-sensitive large U.S. bank, BofA's net interest income should benefit.
The narrative surrounding Bank of America appears to be changing, making it less likely that Warren Buffett's successor sends it to the chopping block.
Greg Abel finally broke a 14-quarter streak for Berkshire Hathaway (BRKA +1.08%) (BRKB +1.21%) last quarter, when he purchased more stocks for the company's marketable equity portfolio than he sold. Before Abel took over as CEO, Warren Buffett spent the last three years trimming and selling off huge positions in Berkshire's portfolio, ultimately leaving Abel with a record $369 billion in cash available to deploy.
There's a good reason Buffett struggled to find good investments. There just wasn't a lot of value in the market available to him. Even today, Abel struggles to find ways to deploy a significant portion of Berkshire's cash. While he's made a splash by adding tens of billions to the Alphabet position Buffett initiated last year, other investments have remained relatively small.
A single table explains exactly why Berkshire has struggled to find attractive opportunities in today's market, but it also highlights the opportunity for investors like you and me to find great value.
Image source: Getty Images.
This table explains exactly where to find value in today's market
The following table shows the P/E ratio of various segments of the market relative to their 20-year historic P/E ratios.
ValueBlendGrowthLarge-Cap119%115.8%110%Mid-Cap96.7%96.9%119.9%Small-Cap91%103.6%134.8%
Data source: J.P.Morgan Asset Management.
The table above shows that large-cap stocks trade at an average premium of 10% to 19% relative to their historical valuations. Value stocks have become the most overvalued relative to their historic trading range. That's a problem for a value investor like Buffett, Abel, or Berkshire Hathaway's other investment manager, Ted Weschler. Large-cap stocks are practically the only way for Berkshire to deploy significant capital. And if the average stock is trading above its historic average, there aren't going to be very many stocks trading at an attractive value.
Buffett summed up the problem in a single sentence in his 2023 letter to shareholders. "There remain only a handful of companies in this country capable of truly moving the needle at Berkshire, and they have been endlessly picked over by us and by others." Not only is Berkshire's investable universe small, but it's also well-followed, which makes it less likely that Berkshire will discover anything the market has overlooked.
$532.02+$6.34 (+1.21%)
NYSE · As of 4:00 PM ET 10/16/26
But if you look further down the table on the left side, you'll find that small- and mid-cap value stocks are trading below their historic valuations. That's exactly where you should be looking for attractive value stocks. Large institutional investors are effectively unable to invest in smaller stocks because it's simply not worth the time to analyze a company just to invest a few million dollars for them when they're managing billions. But small retail investors can probably invest as much as they want in any publicly traded stock.
How to find great value stocks
Focusing on the portion of the market that much larger institutional investors often ignore can help find more mispriced companies and better values.
Investors can easily screen for businesses with consistent profits, growing free cash flow, and manageable debt levels trading at an attractive valuation. Take the top names and do your due diligence to determine whether a company has a durable competitive moat and if there's a reason the market is offering a discount on the stock.
If you don't understand exactly how a business makes money, there's no shame in putting it in the "too hard" pile. As Buffett said, "Investors should remember that their scorecard is not computed using Olympic-diving methods: Degree-of-difficulty doesn't count."
Investors who don't want to do the homework can buy an ETF that invests in the attractive market segment. For those focused exclusively on small-cap value stocks, the Avantis US Small Cap Value ETF (AVUV -0.30%) is a favorite. It doesn't just filter by valuation; it also uses profitability metrics and book value as additional checks to weed out value traps.
AVUV American Century ETF Trust - Avantis U.s. Small Cap Value ETF$120.08-$0.36 (-0.30%)
NYSEMKT · As of 4:00 PM ET 10/16/26
The Dimensional US Targeted Value ETF (DFAT -0.17%) includes both small- and mid-cap value stocks. It also avoids companies with poor profitability to keep value traps out of the portfolio. As an actively managed ETF, it also empowers its traders to substitute stocks within its investable universe for one another to reduce transaction costs and potential tax consequences.
Either is a great option for investors looking to add exposure to the historically undervalued portion of the market, where big investors like Berkshire Hathaway don't spend much time.
When Berkshire Hathaway NYSE: BRK.B makes a move, the entire market stops to look. So when news broke on Oct. 14 that Berkshire had poured another $330 million into a relatively unknown Italian software company, the reaction was quick and absolutely dramatic.
Shares of Bending Spoons NASDAQ: BSP rocketed more than 40% in a single session. It’s the kind of headline and price action that grabs every investor's attention and raises the obvious question: with arguably the most famous name in investing doubling down, should you buy too?
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What Is Bending Spoons?Most investors have likely never heard of Bending Spoons, but they've probably used one of its products. The Milan-based technology company, founded in 2013, operates a portfolio of digital apps and software platforms that reads like a tour of the internet's familiar names.
Bending Spoons Today
BSP
Bending Spoons
$47.07 -8.70 (-15.60%)
As of 10/16/2026 04:00 PM Eastern
$30.11▼
$59.5060.35
$44.00
It owns Evernote, the note-taking app, along with WeTransfer, Meetup, StreamYard, the video platform Brightcove, and Remini, a popular AI-powered photo-enhancement app.
The business model is what makes it interesting, and it is no coincidence that it caught Berkshire's eye. BSP acquires established digital businesses, streamlines them, and runs them for cash flow, much the way Berkshire itself buys and holds operating companies. Essentially, it is an acquisition machine for software, and the fresh capital from Berkshire is explicitly earmarked to fund more deals. Led by co-founder and CEO Luca Ferrari, the company generates annual sales of roughly $3.3 billion and only went public this past July.
The Berkshire Investment, and the CatchHere is where the story gets a bit more nuanced than the headline and price action suggest. Berkshire's latest $330 million investment, which lifts its stake to 4% and makes it the sixth-largest shareholder, follows a $600 million initial investment made during Bending Spoons' July IPO. That brings Berkshire's total investment to nearly $1 billion, a genuine show of confidence in the company and its strategy.
But the details matter enormously. Berkshire did not buy its shares on the open market like an ordinary investor. It acquired 10 million newly issued shares through a private placement at $33 per share, a price already about 13% below the stock's pre-announcement level. With shares now trading near $54 after the surge, anyone buying today pays roughly 60% more than Berkshire did.
That’s no small detail. Berkshire negotiated and now has a fantastic, built-in margin of safety that anyone chasing the stock after a 40% pop simply won't get.
But Should You Chase It?After accounting for the premium over Berkshire's entry price and this week's surge, Bending Spoons is now far from cheap. The stock trades at a trailing price-to-earnings ratio of nearly 70 and roughly 10 times sales, demanding multiples that leave little room for a misstep. The market has effectively priced in many quarters of flawless execution on the company's acquisition strategy.
Current Price$47.07High Forecast$72.00Average Forecast$44.00Low Forecast$36.00Bending Spoons Stock Forecast Details
And Wall Street isn't buying the hype just yet. Despite the Berkshire halo, analysts rate Bending Spoons a Hold, with an average price target of $44. That's well below the current share price, a clear sign analysts think the stock has sprinted well ahead of its fundamentals. Put simply, the professionals covering the name see downside potential from here, not upside, at least until the valuation cools or the business grows into it.
Of course, none of these points make Bending Spoons a bad company. It is an interesting, fast-growing business with a proven operator at the helm and a strategy that has clearly impressed one of the world's largest companies, with projected earnings growth north of 79% to show for it. But even a wonderful business can be a poor investment if you overpay.
Admire the Buyer, Mind the PriceThe instinct to follow Berkshire is natural, and Bending Spoons has earned a place on the watchlist for anyone drawn to a software roll-up with serious backing. But chasing the stock days after a 40% single-session surge, at a price nearly 60% above what Berkshire itself paid and well above the analyst consensus target, is a very different proposition from the deal Berkshire actually struck.
For investors drawn in by the headline and fundamentals, the wiser play may be patience: let the hype settle, watch whether the valuation and price reset, and remember that even when you admire the company doing the buying, the price you pay is what determines your return.
Should You Invest $1,000 in Bending Spoons Right Now?Before you consider Bending Spoons, you'll want to hear this.
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Warren Buffett is the former CEO and chairman of Berkshire Hathaway.
Paul Morigi/Getty Images for Fortune/Time Inc
Berkshire Hathaway's latest bet isn't a no-brainer or a head-scratcher; it's somewhere in between.
What's the deal?Berkshire — which has seen Warren Buffett retire as CEO and chairman since the turn of the year — has agreed to invest $330 million in Bending Spoons, on top of a $600 million injection when the Italian tech conglomerate went public in July, giving the Nebraska behemoth a 4% stake.
Bending Spoons disclosed Berkshire's backing in a press release on Wednesday, catapulting its stock up nearly 50% over two days, a phenomenon known as the "Buffett effect." The stock fell on Friday, but still ended the week more than 20% above Monday's opening price.
Berkshire has agreed to buy 10 million shares for $33 each, around a 13% discount to Bending Spoons' closing price of $38 on Tuesday, the day before the deal was announced.
CEO and cofounder Luca Ferrari described Berkshire in the press release as "among the finest and most respected capital allocators in the world," and a "longstanding inspiration" for Bending Spoons.
Neither company responded to requests for comment from Business Insider.
What is Bending Spoons?Bending Spoons acquires digital businesses, transforms and optimizes them to increase profits, then reinvests those earnings in further acquisitions.
It has been pursuing that strategy for more than a decade and has never sold a material business. Its acquisitions to date include AOL, Evernote, Vimeo, Eventbrite, and WeTransfer.
Ferrari's company said in the press release that it "strives to envision the most successful version of an acquired business," then works to close the gap between that vision and reality "as quickly and completely as possible."
Bending Spoons said that typically involves "deep" transformation such as "reorganizing teams, overhauling technology, redesigning user interfaces, accelerating product development, and enhancing marketing and monetization," often with a good dose of AI.
Ferrari gave the example of Evernote on a recent episode of the "Joys of Compounding" podcast.
He said the business had around 350 employees when Bending Spoons acquired it at the start of 2023. That shrank to roughly 60 within 12 to 18 months, and now it's being run by around 20 people.
Yet Ferrari said Evernote "launched by far the biggest update to the product in maybe a decade" this spring.
Bending Spoons CEO Luca Ferrari.
Marco Bertorello / AFP via Getty Images
Why is Berkshire's investment a surprise?First and foremost, Bending Spoons is a tech conglomerate, and Berkshire has eschewed tech for most of its history with a few big exceptions, namely Apple and Alphabet.
That's because Buffett is a bargain hunter who likes to invest with a "margin of safety" in case something goes wrong, and tries to stay within his "circle of competence," only buying into what he deeply understands.
Tech companies have rarely been a good fit for his approach, as they typically have lofty valuations, unpredictable outlooks, and complex products and services.
Indeed, Bending Spoons generated 32 cents in earnings per share last year. Berkshire is paying more than 100 times that per share in the coming private placement.
It's true that Bending Spoons is growing fast, with revenue surging 126% year-on-year to $704 million in the second quarter and adjusted operating income jumping 150% to $381 million. Few, however, would consider the stock a bargain from a fundamental perspective.
Berkshire is also famously a hands-off acquirer, offering founders the opportunity to cash out while continuing to run their businesses as they see fit. In contrast, a core aspect of Bending Spoons' strategy is revamping its acquisitions.
How does the deal make sense?Berkshire and Bending Spoons have similarities as well as differences.
Both are decentralized conglomerates that buy businesses not to flip them, but to own them for the long term. Berkshire is a web of largely autonomous companies, including GEICO, Duracell, Fruit of the Loom, Pilot Travel Centers, and BNSF Railway. It has long offered a permanent home to the businesses it buys.
Bending Spoons has positioned itself as a forever owner, too, emulating Berkshire's approach of taking the cash generated by a subsidiary like See's Candies and using it to acquire more businesses.
Ferrari said in his recent podcast interview that Bending Spoons has fostered a culture of caring deeply about the company, and doesn't centralize decision-making in part because that "deprives people of that precious sense of ownership."
Buffett famously wrote "An Owner's Manual" for Berkshire shareholders. He's championed that mindset by keeping more than 99% of his net worth in Berkshire stock, and encouraging the company's other executives and directors to have skin in the game too.
Ferrari also said on the podcast that he has a "pathological love of learning" across different domains. That echoes Buffett's boundless curiosity and the late Charlie Munger's insatiable appetite for knowledge. Buffett's longtime business partner studied architecture, physics, history, meteorology, psychology, law, and, of course, investing, among other subjects.
Beyond their similar philosophies, it's worth noting that investing less than $1 billion into Bending Spoons isn't a huge deal for Berkshire. It has a $1.1 trillion market capitalization, had a $365 billion cash pile at the end of June, and its biggest stock position was worth about $66 billion at that time.
What's the takeaway?The Bending Spoons deal could mark an evolution in Berkshire's investing style following Buffett's departure as CEO and chairman.
Berkshire hasn't commented on the purchase or on whether Buffett was involved. Its relatively small size could mean his remaining investment manager, Ted Weschler, was behind it.
Or it might be new CEO Greg Abel, who piled an additional $10 billion into Alphabet in a private placement this summer after consulting with Buffett.
Whoever was responsible, and whatever their reasons for investing, this will be an intriguing wager to watch for Berkshire followers.
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Theron Mohamed is a London-based correspondent on the International team at Business Insider. His coverage spans finance, investing, wealth, markets, and the economy.Theron joined BI in 2019 as a reporter at Markets Insider and rose to the rank of correspondent before moving to the Trending team then the broader International team. He previously covered tech, media, and telecom stocks for Investors Chronicle magazine and had a brief stint on the Financial Times' Data team. He interned at the Wall Street Journal in New York where he primarily wrote for Heard on the Street.Theron has freelanced for The Independent, The Telegraph, WIRED, and several smaller publications. He holds an undergraduate degree in geography from the London School of Economics, and a master's degree in journalism from Columbia University.Theron often covers Warren Buffett, Michael Burry, and other elite investors. He also writes about the world's wealthiest people and shares financial advice from all manner of rich and successful people.Email Theron at [email protected] and follow him on X @theron_mohamed.
When Warren Buffett stepped down as CEO of Berkshire Hathaway (BRKA +1.08%) (BRKB +1.21%), there were a lot of eyes on his successor, Greg Abel. Would Buffett's replacement follow the Oracle of Omaha's approach to buying stocks?
Less than a year into Abel's tenure, we're getting an answer. Berkshire went on a buying spree during the second quarter, adding to its positions in Alphabet (GOOGL -2.47%) (GOOG -2.32%) and Delta Air Lines (DAL -3.47%). And another purchase stood out -- $4.5 billion of Berkshire Hathaway's own stock.
Here's what that means for investors.
Berkshire Hathaway CEO Greg Abel. Image source: Getty Images.
Berkshire is putting its cash to work For years, Buffett accumulated an enormous cash reserve at Berkshire Hathaway, preferring to wait for attractive investment opportunities rather than overpay for stocks.
That approach helped Berkshire build a reputation for finding companies with strong competitive advantages and buying their shares when they traded below their intrinsic value -- what the underlying business is actually worth.
Abel appears to be following that philosophy, although he's becoming more aggressive about putting Berkshire's money to work.
During the second quarter, Berkshire increased its Alphabet holdings substantially, adding millions of shares of the Google parent company. It also bought an additional 17.5 million shares of Delta, increasing its stake by 44%. Berkshire opened a position in Delta during the first quarter -- Abel's first as CEO -- and now has more than 57 million shares of Delta stock.
BRKB Berkshire Hathaway$532.02+$6.34 (+1.21%)
NYSE · As of 4:00 PM ET 10/16/26
Berkshire ended June with approximately $359.2 billion in cash and short-term investments. Even after its recent purchases, Abel has plenty of money available for additional investments.
Why Berkshire's buybacks matter Berkshire Hathaway spent approximately $235 million buying back shares during the first quarter, then increased that amount to $4.5 billion in the second quarter.
Berkshire has a specific rule governing repurchases. According to its second-quarter regulatory filing, the company can buy back shares only when its CEO determines that the price is below Berkshire's conservatively estimated intrinsic value. So, Abel isn't buying Berkshire shares simply because the company has money available. He's buying because he believes the stock offers value.
Berkshire purchased Class B shares at an average price of $476.01 in May and $487.98 in June. Those figures give investors something useful -- actual prices at which Berkshire's leadership was willing to invest billions of dollars in its own business.
Should you buy Berkshire Hathaway stock, too? One of Berkshire Hathaway's strengths is that it's a conglomerate -- the company owns dozens of businesses, including insurance companies, consumer goods such as Duracell, and iconic brands like Dairy Queen. It also has a huge investment portfolio, with large stakes in blue chip companies like Apple and Bank of America. That means it has exposure to several different parts of the economy.
For investors considering Berkshire Hathaway, the company's recent repurchases provide a useful starting point for evaluating the stock.
After all, when Berkshire's own management is willing to spend billions buying its shares, that's worth a closer look.
Bank of America is an advertising partner of Motley Fool Money. Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, and Berkshire Hathaway. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.
Warren Buffett once said in an interview that he doesn't think Berkshire Hathaway (BRKA +1.08%) (BRKB +1.21%) has ever participated in an initial public offering (IPO). There are too many incentives on the sell side for it to make sense to buy an IPO, he argued.
Greg Abel may have just found the exception that proves the rule. The new Berkshire CEO invested $600 million in the Bending Spoons (BSP -15.60%) IPO in July, when the company raised $1.68 billion at a valuation of around $18 billion. He recently added another $330 million to the investment in a private placement, giving Berkshire a 4% stake in the Milan-based tech company.
It's unclear whether Abel or Ted Weschler (who manages about 6% of Berkshire's equity portfolio) is responsible for the purchases. While it goes against Buffett's thoughts on IPO stocks, the investment is rooted in the fundamentals that drove Buffett's success for over 60 years in charge of Berkshire.
Image source: Getty Images.
Some similarities and differences with Berkshire Hathaway
Bending Spoons is in the business of buying software companies, improving operations, collecting cash flow, and reinvesting in more software companies. In the same ethos as Berkshire Hathaway, it plans to hold the companies it acquires forever.
Additionally, it doesn't chase "sexy" names like hot new AI companies. It sticks to relatively boring businesses that other investors (either private or public) may have dismissed. Past acquisitions include AOL, Evernote, Vimeo, Eventbrite, and Meetup.
Unlike Berkshire, which takes a mostly hands-off approach with its acquisitions, Bending Spoons completely revamps the operations of each business it adds to its portfolio. The company hires best-in-class operators to take over new acquisitions. It focuses on cutting costs, expanding product development, and improving monetization (typically by increasing prices). Its track record is solid, and it's developed a repeatable playbook.
$532.02+$6.34 (+1.21%)
NYSE · As of 4:00 PM ET 10/16/26
The company benefits from a virtuous cycle. As it builds its portfolio and track record of acquisitions, it has a better understanding of how much a business is worth as a stand-alone company and how much more it's worth inside Bending Spoons. That allows it to outbid competitors while still producing solid returns on its investment.
Management has also invested heavily in artificial intelligence, which benefits from access to data from across its portfolio of businesses. In its IPO prospectus, Bending Spoons attributes its worker productivity to AI improving its operations. Revenue per full-time employee increased from $1.12 million in 2023 to $2.57 million in 2025, and it's on track to exceed $4 million this year.
Why would Berkshire Hathaway buy it?
Bending Spoons aims to achieve an internal rate of return of 65% on a levered basis and 25% on an unlevered basis. That's a high hurdle, but management has been able to find investments and deploy capital. It bought six companies for $1.92 billion in 2025. It recently acquired Airtable for $1.285 billion and agreed to buy Miro for $1.355 billion.
Management's ability to identify businesses capable of achieving that return on invested capital may be exactly what attracted Berkshire to the company. In an interview earlier this year, Buffett shared what he looks for in a good business. The trick in investing "is to find businesses that are going to earn high returns on capital for an extended period of time."
Bending Spoons is well-positioned to do exactly that. That shows up in a strong operating margin and growing cash from operations. The company's operating margin expanded to 34% from 32% last quarter, and cash from operations nearly tripled to $254 million.
BSP Bending Spoons S.p.A.$47.07-$8.70 (-15.60%)
NASDAQ · As of 4:00 PM ET 10/16/26
That said, there are some risks involved with buying the stock. The company has significant leverage, with $4.09 billion in net debt. That's 2.4 times adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), and 3.25 times shareholders' equity. It recently added more debt, in addition to the $330 million equity raise from Berkshire. With the rising cost of capital, Bending Spoons needs to ensure that it can meet its target internal rate of return on acquisitions.
Additionally, Bending Spoons may face challenges deploying a growing amount of capital into new acquisitions each year. As the amount it looks to invest grows, finding enough acquisitions or big enough acquisitions that meet its benchmarks becomes more difficult.
It's exactly the challenge Berkshire Hathaway faces today, except at a much larger scale. Management says it has identified over 1,000 potential acquisition targets with total revenue exceeding $400 billion, so it doesn't think it'll be a problem for some time. Still, markets can change quickly, and potential returns could drop.
Overall, the company is an interesting business. The stock soared higher after Berkshire's investment. Berkshire paid just $33 per share in its private placement. It may be worth waiting for the market to digest the news before taking a position in the company, but it could be a valuable addition to a portfolio if the stock price comes down closer to what Berkshire paid.
At the time of its Nasdaq debut in July, Bending Spoons was a little-known holding company out of Italy that owned older internet names like AOL, Vimeo, Eventbrite and Evernote.
Less than four months later, the Milan-based firm has emerged as a surprising home for former high-flying software startups that have been thrust aside by the artificial intelligence boom. Its M&A plan got a major boost this week from the most famous holding company on the planet: Berkshire Hathaway.
Berkshire, which Bending Spoons describes as a "longstanding inspiration" for its strategy, has now invested over $900 million in the company, including a $330 million stake disclosed on Wednesday. Wall Street loved the deal, sending Bending Spoons' stock up 41%, though some of those gains were lost later in the week, leaving the company with a market cap of about $30 billion.
"Berkshire's decision to add to its position just a few months after the IPO and at these levels provides another vote of confidence in the Bending Spoons model from one of the world's most respected long-term investors," wrote analysts at Mizuho, in a report after the announcement.
The other big news out of Bending Spoons this week underscores the flipside of the business: job cuts. In August, Bending Spoons announced it was buying workflow software provider Airtable for about $1.3 billion, or almost 90% below the company's peak valuation from late 2021. Bending Spoons said Monday that a "large portion of the pre-acquisition team" from Airtable would be leaving with "substantial separation packages." Layoffs were previously implemented at Evernote, Vimeo, WeTransfer and others in the portfolio.
For the technology industry, Bending Spoons' moves represent the latest example of how quickly fortunes are turning in the AI era, as new agents powered by large language models displace software developers and the products they built. With Anthropic and OpenAI marching toward trillion-dollar valuations, businesses are putting more valuable work in their hands at the expense of a host of software-as-a-service names, creating a phenomenon that's become known as the "SaaSpocalypse."
Shares of Intuit, HubSpot and Adobe are all down at least 30% this year, and a long list of private SaaS companies that were once venture darlings are now struggling to find capital, with the public market showing no appetite for IPOs. Last month, Bending Spoons agreed to buy collaboration software vendor Miro, once valued at $17.5 billion, for $1.36 billion.
"You're either like a hot thing or you're nothing," said Ethan Kurzweil, founder and managing partner at Chemistry VC and a veteran software investor. Kurzweil said he uses Airtable, and said there are plenty of good SaaS products on the market led by solid teams, "but they're not on the frontier anymore."
An app turned acquirer Bending Spoons was launched in 2013 by friends Luca Ferrari, the CEO, Matteo Danieli and Francesco Patarnello. A mobile app they'd created called Evertale failed to take off, and they used the $40,000 they had left to build an operating company instead of "products nobody wanted," according to the IPO prospectus.
Bending Spoons has announced all of its biggest deals in the last few years, beginning with Evernote in 2022, followed by Brightcove in 2024, and Vimeo, AOL and Eventbrite in 2025.
The company held its IPO on June 30, raising about $1.7 billion at $29 a share, and hit the Nasdaq the next day. The stock closed Friday at $47.07.
Stock chart of Bending Spoons since its July 1st initial public offering date.
Prior to Bending Spoons' recent jump into enterprise software, some of the leading acquirers in the space over the past decade were private equity behemoths Thoma Bravo and Vista Equity Partners. Those firms were aiming to buy what they viewed as undervalued SaaS companies and, through a combination of cost cuts, efficiency improvements and rollups, turn them into assets that could be sold or taken public at a higher price.
Bending Spoons is using a different playbook. The company isn't looking for eventual exits but rather wants to generate profits from the businesses it buys, similar to the Warren Buffett model. But unlike Berkshire, Bending Spoons' focus is technology, and it's taking a hands-on approach with its own software, operations and personnel decisions.
Nick Mehta, former CEO of cloud software vendor Gainsight, said private equity firms are limited now because "they got their nose bloodied."
"They paid much higher prices and have so many troubled companies that it's difficult for them to take swings now," said Mehta, who sold Gainsight to Vista in 2020.
Thoma Bravo and Vista didn't respond to requests for interviews. Bending Spoons told CNBC in a statement that it hadn't been outbid for a target in "several years."
As the company started jumping into SaaS, Mehta said "Bending Spooned" became a verb in Silicon Valley, referring to companies getting scooped up for pennies on the dollar.
"Unfortunately, a lot of my friends in that game are stuck," Mehta said. "Investors want out but there are no buyers. Anything pre-ChatGPT is legacy now."
Lloyd Walmsley, an analyst at Mizuho, said Bending Spoons' model is distinct from the older buyout approach.
"I think there aren't a lot of people that do what these guys do in terms of the depth of operations and the willingness to make substantial product changes," Walmsley said in an interview. "It's not typical of traditional private equity firms to make anywhere near this level of change."
For customers of the companies that Bending Spoons buys, sudden price hikes can follow.
In April 2023, months after the Evernote acquisition, Bending Spoons lifted the annual personal subscription price to $130 from $70. Later, the company changed its offerings, charging $100 for its so-called starter plan and $250 for "Evernote Advanced," compared to the $170 it had been charging for the pro plan.
"My first reaction was like, Oh man, I guess I have to switch to OneNote," said Walmsley, referring to Microsoft's notetaking app. But he said he stuck with Evernote.
"They're really savvy at finding these things that they provide a lot of value, and the switching costs are really high," Walmsley said. "The price isn't that high relative to the switching cost."
Bending Spoons uses the profits from its portfolio companies for future growth, the "overwhelming majority" of which comes from doing more deals, Ferrari told CNBC in an interview on Thursday.
"There are certain opportunities for improvement we can unlock over the first few years, and then the business will have whatever organic growth is intrinsic in that market," Ferrari said.
Read more CNBC tech newsApple's $1,999 iPhone Duo puts the company's status-symbol power to the testTrump says White House didn't order Starlink restrictions in UkraineBlue Origin plans $330 million Florida expansion to ramp New Glenn launchesSpaceX AI policy leader grilled by NYC Council on Grok safety, sexualized imagesFor Berkshire and its fellow Bending Spoons investors, the bet is still unproven.
The products have to remain desirable enough that customers are willing to pay up at a time when AI is squeezing margins across much of the software sector. In its first earnings report as a public company in August, Bending Spoons said revenue more than doubled from a year earlier to over $700 million, with growth almost entirely driven by acquisitions, while net income climbed 171% to $177 million.
That was before the Airtable deal had closed and Miro had yet to be announced. In the coming quarters and years, Wall Street will get a clear picture of whether the firm's structure can revive software.
On the earnings call in August, an analyst asked whether Airtable represents a long-term shift in the M&A strategy towards enterprise.
Ferrari said that about half of Bending Spoons' revenue already comes from professional businesses, largely through Brightcove and Vimeo, which has an enterprise component. The focus on software of late, he said, has more to do with where he's finding value after a hefty selloff.
"Most enterprise SaaS businesses were valued at irrationally high levels until somewhat recently," Ferrari said. "We never saw those prices making any sense."
(This is the Warren Buffett Watch newsletter, news and analysis on all things Warren Buffett and Berkshire Hathaway. You can sign up here to receive it every Friday evening in your inbox.)
Berkshire Hathaway shares closed Friday at their highest level since Warren Buffett told shareholders at the May 2025 annual meeting he planned to step down as CEO at the end of that year.
The day before that Saturday surprise, both the Class A and Class B shares had closed at all-time highs.
Over the next three months, they lost more than 14% of their value as investors worried a "Buffett premium" was dissolving.
It's been more than a year since their post-meeting low in August of 2025, and the recovery has not been a straight line, but BRK.A ended Friday at $798,000, just 1.4% below its all-time closing high of $809,350.
The B shares finished at $532.02, also 1.4% under their all-time closing high of $539.80.
A loss Thursday broke a 10-session winning streak that added 5% to Berkshire's stock prices but they rebounded with gains of more than 1% Friday.
CNBC Pro thinks investors may be happy Berkshire is spending some of its big cash pile under CEO Greg Abel, with $4.5 billion of buybacks in Q2, investments in Alphabet, Taylor Morrison Home, Lennar, (although there haven't been any buys of that stock since October 2), and now, Bending Spoons. (More on that below).
It also notes Keefe, Bruyette & Woods analyst Meyer Shields believes higher short-term interest rates are helping to lift the shares.
Berkshire still has roughly $360 billion in cash, "a good symbol of continued patience under the new CEO," and those higher rates mean "they'll be making more money" on that money.
In addition, its insurance operations have benefited from a quiet hurricane season so far.
Higher oil prices are good for its $19 billion stake in Chevron, which closed Friday at an all-time high after gaining almost 36% since the start of July. Berkshire's energy-related subsidiaries are also getting a tailwind.
And recently, Berkshire may be getting a boost as investors shift away from high-flying AI and tech stocks and turn to "old" economy names.
For example, Coca-Cola, a long-time Buffett favorite and now a $37.6 billion holding, also closed Friday at an all-time high, perhaps with some extra help from KFC's switch from Pepsi to Coke. It's up 34% year-to-date.
Berkshire's position has gained $2.4 billion since last Friday, overtaking Alphabet to become the third largest stake in its portfolio. (See the full top 10 below.)
Berkshire's B shares have cut their June 1 deficit of 17.5 percentage points versus the S&P 500 by almost two-thirds.
They are now 6.0 percentage points behind the benchmark for the year.
Atypical bet on 'buzzy' Italian tech company is big win ... so farBerkshire Hathaway's surprising bet of close to $1 billion on Bending Spoons is paying off big, at least in the short term.
The Italian company, which began trading on Nasdaq in the U.S. in July, buys cast-off internet names like AOL, Evernote, and Vimeo, uses AI to cut costs, and deploys the savings to make more acquisitions.
In late July, CNBC Pro said, "Wall Street is buzzing," and "analysts ... see big gains ahead."
The tech stock is decidedly not a typical Berkshire value play, trading at a large multiple to its earnings.
But before Wall Street's open Wednesday morning, a Bending Spoons news release revealed Berkshire is investing a "further" $330 million in the company by purchasing 10 million newly issued shares at $33 per share in a private placement.
That was already an almost 12% discount from Tuesday's closing price of $37.86 and the news sent Bending Spoons shares even higher.
They hit an intraday high of $58.56 before closing up 41% at $53.46 on Wednesday.
Bending Spoons shares are up 24.3% over the three trading days since the revelation, after giving up a chunk of their earlier gains in Friday's tech sell-off to end at $47.07.
That's a solid 42.6% higher than Berkshire's $33 purchase price for a profit, on paper, of nearly $141 million.
But what's that "further" in Bending Spoon's statement?
The release also disclosed, apparently for the first time, that Berkshire invested $600 million at Bending Spoon's IPO more than three months ago.
The release doesn't specify how many shares Berkshire bought in July, and Bending Spoons wouldn't confirm my math, but assuming Berkshire paid the $29 per share IPO price, that initial purchase would have been almost 20.7 million shares.
That puts Berkshire's holding now at close to 30.7 million shares, which would be worth more than $1.4 billion at Friday's close, a gain of 55.3% for its overall investment of $930 million.
watch now
Bending Spoon's release also says the "new investment brings Berkshire Hathaway's ownership to 4%."
The company told me in an email it hasn't "specifically disclosed" how many outstanding shares it has now, "but we had 635 million fully diluted weighted average shares outstanding in Q2, we issued 34 million shares as part of the IPO, and we will be issuing an additional 10 million as part of this transaction."
Using those numbers, Berkshire's presumed 30.7 million shares are a 4.5% stake, and that's what I've put in the Berkshire Portfolio Tracker for now.
We may learn more next month about exactly how many shares Berkshire bought in the IPO when its portfolio snapshot as of September 30 is due to be disclosed.
Another unknown: who at Berkshire made the call to take a stake in Bending Spoons.
watch now
Bending Spoons CEO and Co-Founder Luca Ferrari shares Wall Street's enthusiasm about Berkshire's investments, saying in the news release the Omaha company "has been among the finest and most respected capital allocators in the world, and is a longstanding inspiration for Bending Spoons."
Morningstar's Greggory Warren (who was one of the designated analyst questioners at Berkshire shareholders meetings from 2014 to 2019) writes the Bending Spoons buy, along with Berkshire's now $36 billion stake in Alphabet, show "the firm is finally moving out of its comfort zone to find places to put capital to work, which should be viewed as a positive for long-term investors."
At Barron's, Andrew Bary says, "Many Berkshire holders would like to see the company invest more heavily in stocks given the company's $350 billion-plus in cash, but Bending Spoons was a surprise" given its high valuation.
BUFFETT & BERKSHIRE AROUND THE INTERNETHIGHLIGHTS FROM CNBC'S BUFFETT ARCHIVE'I am one-quarter Coca-Cola' (2015)Warren Buffett defends Coca-Cola, a big and long-time Berkshire Hathaway holding, against health concerns over sugary beverages.
WARREN BUFFETT: Yeah well — people have been drinking Coca-Cola since 1886, so I imagine that there's been some —
I don't know of any study that's been made on the lifetime of heavy users of Coca-Cola versus people who drink nothing but water.
But speaking for myself, I'm 84, literally one-quarter of all the calories I've consumed in the last 30 years have been Coca-Cola. And I don't see how anybody can feel any better than I feel.
I am one-quarter Coca-Cola, and I can tell you, I haven't missed a day of work, you know — since I had the prostate cancer — radiation — three years ago. And I don't think the prostate cancer was caused (laughs) by Coca-Cola.
So — I — and all my friends drink it like crazy.
So there's 1.9 billion eight-ounce servings of Coca-Cola products sold around the world today, and there will be more than 1.9 billion a year from now, and more than that five years from now, and more than that ten years from now.
And that's been true. And some people will like other things, and — and if they like broccoli and Brussels sprouts, God bless them, you know, but don't invite me for dinner. (Laughter)
Berkshire Cash as of June 30: $365.5 billion (Down 8.0% from March 31)
Excluding Rail Cash and Subtracting T-Bills Payable: $359.2 billion (Down 3.8% from March 31)
Berkshire repurchased $4.5 billion of its shares in Q2 2026.
BERKSHIRE'S TOP EQUITY HOLDINGS - Oct. 16, 2026Berkshire's top holdings of disclosed publicly traded stocks in the U.S. and Japan, by market value, based on the latest closing prices.
Holdings are as of June 30, 2026, as reported in Berkshire Hathaway's 13F filing on August 14, 2026, except for:
Mitsubishi, which is as of April 30, 2026The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.
QUESTIONS OR COMMENTSPlease send any questions or comments about the newsletter to me at [email protected]. (Sorry, but we don't forward questions or comments to Buffett himself.)
If you aren't already subscribed to this newsletter, you can sign up here.
Also, Buffett's annual letters to shareholders are highly recommended reading. There are collected here on Berkshire's website.
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In August 1994, Berkshire Hathaway (BRKA +1.08%)(BRKB +1.21%) ended a seven-year buying spree in Coca-Cola (KO +2.06%). All told, Warren Buffett spent about $1.3 billion on what are now 400 million shares of the drinks giant.
And Berkshire still owned all of those shares at the end of June, according to its last quarterly filing. With Coca-Cola stock at around $93 as I write, near its record high, the stake is worth about $37 billion.
Even more impressive, Berkshire now gets about $848 million a year in Coca-Cola dividends. That's about 65% of what it originally spent on the shares, every single year.
Could someone buying the stock near today's record expect anything similar? I doubt it. And I think the reason has more to do with the price Buffett paid than with the business he bought.
Warren Buffett and Bill Gates. Image source: Getty Images.
Bigger dividend checksBuffett laid out why this investment did so well in Berkshire's 2022 shareholder letter.
"All Charlie [Munger] and I were required to do was cash Coke's quarterly dividend checks," he wrote, after noting Berkshire's yearly dividend from Coca-Cola had climbed from $75 million in 1994 to $704 million in 2022.
The checks kept getting bigger from there. Berkshire took in $816 million in Coca-Cola dividends in 2025, according to the conglomerate's latest annual letter. In February, Coca-Cola boosted its quarterly dividend around 4% to $0.53 a share, its 64th consecutive annual increase. On Berkshire's 400 million shares, the new rate means around $848 million a year. The 1994 check has grown more than elevenfold.
But the growth has slowed. Between 1994 and 2022, Berkshire's Coca-Cola dividends compounded at around 8% yearly. The rise from $704 million to the current $848 million rate means growth closer to 5% a year.
Buffett bought a far higher yieldThe pace of raises counts, but so does the starting point. Berkshire's $75 million in dividends in 1994 was around 5.8% of what it paid for the shares. In other words, Buffett was already getting a solid yield the year Berkshire finished buying, before three decades of raises were added to it.
I'd say that starting yield did as much of the work as the raises did.
A buyer today starts from a much lower base. At around $93, Coca-Cola's $2.12 yearly dividend comes to a yield of about 2.3%. Put the same $1.3 billion into the stock today, and it'd pay about $30 million a year in dividends, under half of what Berkshire got in 1994.
Even if Coca-Cola keeps raising its payout about 5% a year, a buyer at today's price would need almost two decades to earn a 5.8% yield on what they paid.
Is Coca-Cola stock a buy near a record high?Sure, Coca-Cola's business is doing well. Showing its momentum, the company grew organic revenue (sales growth excluding currency moves, acquisitions, and divestitures) 6% for the second quarter of 2026 versus the same period last year.
On a non-GAAP (adjusted) basis, earnings per share climbed 11% year over year, and 14% in the year's first six months. And management now expects adjusted earnings per share to grow 9% to 10% in 2026, helped by currency. That suggests slower growth in the second half than in the first.
But the stock has arguably run ahead of that growth. Coca-Cola shares have risen around 34% since 2025 ended, adding more than $9 billion to the value of Berkshire's stake.
$93.90+$1.90 (+2.06%)
NYSE · As of 4:00 PM ET 10/16/26
At about 29 times its adjusted earnings for the last four quarters, Coca-Cola stock costs much more than the 23 times earnings it fetched at the end of 2025. Based on next year's expected earnings, its price-to-earnings ratio is still around 26.
That's a hefty price for a business expected to grow earnings at a high-single-digit pace. It also means a new buyer might be relying on more than steady dividend growth. They probably need the stock to keep most of this year's higher valuation, too.
In the end, Coca-Cola is still the sort of business Buffett bought. But Berkshire's result came from buying it when the dividend already paid a solid yield, then waiting over 30 years. At around 29 times earnings and a 2.3% yield, a new buyer gets the same business without that starting point.
For investors who already own the stock, holding on looks reasonable to me. But I'd want a higher starting yield than 2.3% before buying in.
Warren Buffett is universally regarded as one of the greatest investors of all time. The former Berkshire Hathaway (BRKA +0.80%) (BRKB +1.11%) CEO is heralded for his folksy quotes and investment wisdom, but when you get right down to the numbers, they show his sustained greatness.
He retired as CEO at the end of 2025, and for the previous 60 years at the helm of Berkshire Hathaway, his portfolio averaged a ridiculous 19.7% compounded annual gain. A 20% average annual return is great for five years or 10 years, but 50 years? That's just elite.
Over the same 60-year period, the S&P 500 has had a compound annual return of roughly half that -- 10.5%. And the Nasdaq Composite, which hasn't even been around that long, launching in 1971, has an 11.8% compound annual return since 1971.
That's a tough act to follow, which Buffett's successor, Greg Abel, acknowledged in the 2025 annual report, calling Buffett "arguably the greatest investor of all time."
Image source: Getty Images.
Abel hands
Berkshire Hathaway has arguably been the most reliable stock to own throughout the Buffett era. Investors grew to trust Buffett, and that trust was rewarded year after year with stellar returns.
Should investors expect the same type of performance from the company over the next 60 years? No, they probably shouldn't. That's a ridiculously high bar to expect the stock to clear over the long term. But that doesn't mean you shouldn't invest in Berkshire Hathaway stock. In fact, it remains one of my favorite stocks.
Abel and company don't need to average 20% returns each year over the next 20, 40 or 60 years to be an attractive buy. They do need to outperform the S&P 500 over time, which I'm confident they will. That's because the company that Buffett set up is built for long-term success.
From the companies it owns to the stocks in its portfolio, Berkshire Hathaway is invested in properties that are designed for long-term performance. They are well-run, efficient market leaders in essential, diverse industries. They are also great values. This creates a portfolio built to navigate various market cycles.
And that makes Berkshire Hathaway a stock that typically shows its strength during downturns, outperforming the market whether it is up or down.
BRKB Berkshire Hathaway$531.53+$5.85 (+1.11%)
NYSE · As of 3:49 PM ET 10/16/26
Framework intact
Abel has already left his mark on the portfolio, making several key changes. He also has a huge cash pile to steer the portfolio where it needs to go. Investors should trust that Abel will continue the stewardship of Berkshire Hathaway, as he has been steeped in its culture and has learned from Buffett since he arrived in the early 1990s. As Abel wrote in the shareholder letter:
Berkshire's culture and values form the basis of our operating framework, which shapes the strategy we pursue and the choices we make as we build Berkshire. As CEO, the framework governs how I lead every day. Our owners' time horizon extends beyond the tenure of any individual CEO. I will not be your CEO for the next 60 years as simple arithmetic makes that -- shall we say -- an ambitious plan. However, 20 years from now, when I will have just a fraction of the tenure that Warren had, my intention is that you -- or your descendants -- will be proud that your company is even stronger.
The portfolio may shift and the returns might not be quite as high, but Berkshire Hathaway should remain a must-own stock for a long time.
This has been a game-changing year for Berkshire Hathaway's (BRKA -0.01%)(BRKB -0.13%) long-term shareholders. Warren Buffett's retirement on Dec. 31 meant that this trillion-dollar conglomerate entered the year without its most familiar face running the show for the first time in well over half a century.
However, the Oracle of Omaha's successor, Greg Abel, hasn't missed a beat. He's grabbed the bull by the horns and revamped several aspects of Berkshire's $356 billion investment portfolio, while keeping one key trait the same: concentration. Abel, like Warren Buffett, has more than 45% of Berkshire Hathaway's invested assets ($160.6 billion) in just three undeniable winners: Apple (AAPL -0.28%), American Express (AXP +2.25%), and Alphabet (GOOGL +0.45%)(GOOG +0.37%).
Portfolio concentration has always been important to Warren Buffett and his successor, Greg Abel. Image source: Getty Images.
Apple: $76.73 billion (21.6% of invested assets)Apple was Warren Buffett's No. 1 holding by market value for close to a decade leading up to his retirement. Although innovation has always been the driving force behind Apple's success, Buffett tended to appreciate the company's exceptional pricing power and consumers' affinity for the brand.
But the Oracle of Omaha dumped 75% of Berkshire's stake in Apple in the nine quarters leading up to his departure. This left the door open for Abel to potentially continue selling shares after he took over as CEO.
AAPL Apple$342.00-$0.96 (-0.28%)
NASDAQ · As of 4:00 PM ET 10/15/26
However, Abel's first annual letter to shareholders in February referred to Apple as one of a few concentrated holdings that's expected to "compound over decades." Though this doesn't rule out further sales of Apple stock, it's pretty evident that Berkshire's new boss appreciates what Apple brings to the table: leading domestic smartphone sales (iPhone) and the world's largest share repurchase program.
American Express: $46.72 billion (13.1% of invested assets)Greg Abel is also overseeing a true legacy holding in American Express (commonly known as "Amex"). Amex has been a continuous holding for Berkshire Hathaway since 1991.
AXP American Express$313.87+$6.92 (+2.25%)
NYSE · As of 4:00 PM ET 10/15/26
Financial stocks were always a favorite for Buffett because they're cyclical. Berkshire's now-former boss understood that while recessions are inevitable, they're historically short-lived. Buying bank stocks and financial services providers enabled Berkshire to take advantage of long-winded economic expansions.
American Express thrives as a double-dipper. It collects fees from merchants when processing transactions, as well as annual fees and interest income from cardholders as a lender.
Furthermore, Berkshire is netting a nearly 45% annual yield on cost from its Amex stake, giving Abel virtually no reason to ever sell this position.
Image source: Getty Images.
However, Warren Buffett's successor really made his mark by piling into Google parent Alphabet. Abel more than tripled Berkshire's stake in the first quarter and added another $17 billion during the June-ended quarter.
There's little doubt that Abel, like Buffett, appreciates Alphabet's virtual monopoly in internet search. According to GlobalStats, Google accounted for roughly 90% of global internet search traffic in September, highlighting its impressive ad-pricing power.
$GOOG Alphabet Q2 FY26: • Revenue +24% Y/Y to $119.8B ($2.8B beat). • Operating margin 34% (+2pp Y/Y). • $98B net gains from equity investments. ☁️ Google Cloud: • Revenue +82% Y/Y to $24.8B • Operating margin 36% (+15pp Y/Y). ▶️ YouTube ads +13% to $11.1B https://t.co/seYlITzfg6
— App Economy Insights (@EconomyApp) July 22, 2026 But it's Alphabet's artificial intelligence (AI) ambitions that have piqued Greg Abel's interest. Since Alphabet integrated generative AI and large language model capabilities into Google Cloud, the world's No. 3 cloud infrastructure services platform by total spend, sales have skyrocketed.
We may be witnessing the birth of an AI applications powerhouse in Google Cloud.
American Express is an advertising partner of Motley Fool Money. Sean Williams has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, American Express, Apple, and Berkshire Hathaway. The Motley Fool has a disclosure policy.
Warren Buffett's track record running Berkshire Hathaway (BRKA +0.43%) (BRKB +0.47%) is hard to top. From 1965 through the end of 2025, the stock delivered a phenomenal annualized return of 19.7%. The S&P 500 index was far behind, with a yearly total return that averaged 10.5% during that time.
Buffett's strategy focused on buying high-quality businesses at reasonable valuations. And the real money was made in holding these positions indefinitely, letting compounding do the work.
The Oracle of Omaha is no longer the CEO. Greg Abel, previously vice chairman of non-insurance operations, is now in the driver's seat. There should be no issue keeping the conglomerate's culture alive. But can the new CEO continue Berkshire's incredible streak of outperformance?
Here's the stock that could help.
Berkshire CEO Greg Abel. Image source: Getty Images.
The conglomerate is backing an AI front-runner
In the third quarter of 2025, Berkshire made headlines when it announced a stake in Alphabet (GOOGL +0.06%) (GOOG +0.06%). After adding to the position, the internet giant, combining Class A and Class C shares, makes up the Omaha company's third largest holding. Even more surprising is the fact that Buffett said he initiated the stake last year.
Although the Alphabet position represents just 3.4% of Berkshire's entire market capitalization, it could help the conglomerate's shares outperform should the leadership team continue to add more capital to the stake. Alphabet shares have skyrocketed 49% in the past 12 months (as of Oct. 13). Even so, they trade at a compelling forward price-to-earnings ratio of 22.8.
Buffett ended his run as CEO by showing the world just how much his circle of competence has evolved. The tech sector was previously considered off-limits by him, since he believed it was extremely difficult to assess the durability of companies' competitive advantages.
GOOGL Alphabet$347.84+$0.20 (+0.06%)
NASDAQ · As of 12:39 PM ET 10/15/26
The Alphabet investment is a vote of confidence that its digital advertising, streaming video, and cloud computing operations have a bright future. And it's a bullish signal about the business' artificial intelligence (AI) strategy.
Alphabet touches nearly every layer of the AI industry -- from research and model development to chips and cloud services. The company also employs its AI capabilities for advertisers and its app users to further improve their experiences. There are very few businesses structured to gain financially from AI in such a comprehensive manner.
Uncertainty at a huge scale
After Buffett's lucrative track record, it's almost impossible for anyone to fill his shoes. Abel certainly seems like the right man for the job, but he faces an uphill battle trying to keep the streak of outperformance alive.
$793,000.00+$3,414.99 (+0.43%)
NYSE · As of 12:29 PM ET 10/15/26
Berkshire's huge scale is a headwind that will get in the way of posting strong returns. Over the past decade, its shares have climbed 260%, lagging the overall market. Bigger isn't better.
And the company has a huge cash pile of $359 billion. Unless there are sizable opportunities to take advantage of, this will be a drag on Berkshire's share-price performance. Cash doesn't possess the return potential that great businesses do.
Alphabet also comes with heightened risk right now, especially compared to its capital-light history. It's in the middle of a spending spree, with capital expenditures set to total $200 billion in 2026 before rising meaningfully next year.
Free cash flow turned negative in the second quarter, marking a new era for the company as it invests aggressively in AI-related infrastructure. From a financial perspective, the uncertainty is high; no one knows how the AI boom will play out.
In the past six decades, Berkshire Hathaway has built tremendous wealth for shareholders under the leadership of Warren Buffett. With Greg Abel as CEO, Alphabet can help grow the conglomerate's intrinsic value. However, investors hoping for the outperformance to continue might want to temper their expectations.
Berkshire Hathaway quietly agreed to pour hundreds of millions into a little-known Milan software company, and the market's reaction raises a sharp question about who actually wins when a giant endorses a stock it bought at a steep discount.
On Wednesday, October 14, 2026, Bending Spoons (NASDAQ:BSP) said Berkshire Hathaway (NYSE:BRK-A | BRK-A Price Prediction, NYSE:BRK-B) agreed to buy 10 million newly issued ordinary shares at $33.00 each in a $330 million private placement. The stock rose 41.20% to close at $53.46, up from $37.86 the prior session.
The placement price was fixed before the market reacted. Anyone buying at the close is paying a large premium to what Berkshire agreed to pay.
The new money adds to the $600 million Berkshire invested at the July 2026 initial public offering, for a combined commitment of about $930 million at purchase prices. That figure reflects what Berkshire paid, and it says nothing about current value.
Berkshire’s own move was quiet. Its Class B shares rose 1.11% to $526.35, a 10th straight daily gain.
Signed Terms Versus Pending Details
A private placement means the company sells new shares directly to one buyer. Bending Spoons receives fresh capital and existing holders are diluted, unlike an open-market purchase where cash simply moves between investors.
The share count, price, and dollar size are disclosed. Closing remains subject to standard conditions, with details to come in a regulatory filing, so the deal should be treated as pending.
The announcement names Berkshire Hathaway only. It attributes no decision to Warren Buffett, and Berkshire issued no release of its own.
What Bending Spoons Owns and How It Earns
The Milan-based company acquires and runs mature software and consumer internet properties, including Airtable, AOL, Brightcove, Eventbrite, Evernote, Tractive, Vimeo and WeTransfer. The strategy is to buy, cut costs, raise prices, and harvest cash.
Its IPO prospectus set a 65% internal-rate-of-return hurdle on a levered basis for recent deals and said it expects to commit almost all available capital to acquisitions for many years.
Co-founder and chief executive Luca Ferrari said: “We were delighted to welcome Berkshire Hathaway as shareholders at our public listing.” The acquisition model compounds while attractive targets exist, but it stalls once only larger, pricier deals remain.
A cash-harvesting operator that studies Teledyne (NYSE:TDY) and Capital Cities fits Berkshire’s template, and so does providing committed capital to a company that wants it. But the stock has traded only since July and has run from $30.11 to $58.94. Four founders hold class A shares carrying 82.71% of total voting power, so outside shareholders, Berkshire included, have little say. Serial acquisitions need funding, and this placement helps provide it.
Why One Headline Moved BSP 41% and Berkshire 1%
Bending Spoons now carries a market value of $32.12 billion. Berkshire is worth about $741.92 billion and held a record $380 billion in cash in the first quarter, so the stake barely registers for Berkshire (for readers who like to shop Buffett’s own cart, we ranked the seven cheapest dividend payers inside Berkshire in a free report).
Because of that asymmetry, the endorsement reprices the small company, while the buyer’s own value barely moves.
At the close, the stock trades near 86 times trailing earnings, above the average analyst target of $47.67.
What BSP’s Premium to Berkshire’s Price Means for Investors
At $53.46, BSP trades well above the price Berkshire agreed to pay. Berkshire’s paper gain is real but unrealized, and it set the price far below where the shares closed.
Berkshire holds the same position as a sliver of a diversified business trading near 11 times earnings.
Berkshire shareholders also own insurance float, railroads, and utilities rather than a single acquisition machine still proving it can integrate deals like Airtable.
If the placement closes as described and BSP holds above $47.67 through its next earnings report, this call is wrong.
Contact [email protected] for any questions or corrections.
Berkshire Hathaway (BRKA +1.18%) (BRKB +1.11%) hasn't given investors much to get excited about this year. While the S&P 500 (^GSPC -1.11%) has gained about 14% in 2026, shares of Warren Buffett's former company are up only 3%.
But there's an interesting argument for owning Berkshire Hathaway that has nothing to do with how the stock is performing today. In fact, it becomes particularly compelling when the rest of the stock market is struggling.
Consider this: Since 1965, Berkshire Hathaway has outperformed the S&P 500 in 11 of the 13 years when the benchmark index posted a negative annual return.
That's an outstanding record -- and one that investors might want to consider before dismissing Berkshire as a stock that's lost its momentum.
Image source: Getty Images.
Berkshire Hathaway has a history of beating during down markets
One of the most interesting features of Berkshire Hathaway's annual shareholder letter is a table comparing the company's stock performance against the S&P 500, including dividends, dating back to 1965.
The results are remarkable. During that period, Berkshire delivered a compounded annual gain of 19.7%, compared to 10.5% for the S&P 500. That's the kind of performance that made Buffett one of the greatest investors of all time.
But I was particularly interested in what happened during the years when the stock market declined. The S&P 500 recorded 13 losing years between 1965 and 2025. Berkshire outperformed the index in 11 of them, including several occasions when its stock actually gained value while the broader market declined.
Years the S&P 500 Posted a Loss Since 1965
Berkshire Hathaway Performance
S&P 500 Performance
1966
-3.4%
-11.7%
1969
19.4%
-8.4%
1973
-2.5%
-14.8%
1974
-48.7%
-26.4%
1977
46.8%
-7.4%
1981
31.8%
-5%
1990
-23.1%
-3.1%
2000
26.6%
-9.1%
2001
6.5%
-11.9%
2002
-3.8%
-22.1%
2008
-31.8%
-37%
2018
2.8%
-4.4%
2022
4%
-18.1%
Source: Berkshire Hathaway.
For example, in 2022, the S&P 500 fell 18.1% as inflation and rising interest rates weighed on stocks. Berkshire managed a 4% gain. And during the 2008 financial crisis, the S&P 500 plunged 37%. Berkshire had a bad year as well, falling 31.8%, but shareholders still came out ahead of investors holding the broader index.
The exceptions were 1974 and 1990, when Berkshire suffered steeper losses than the S&P 500. In 1974, Berkshire plunged 48.7%, compared to a 26.4% decline for the index.
So, Berkshire isn't necessarily a haven when stocks fall. But its history suggests it has frequently provided investors with some protection against the worst of a market decline.
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Why Berkshire Hathaway is different
There's a reason Berkshire has held up relatively well in difficult markets. It's not a typical stock, and its business isn't dependent on any single industry.
Berkshire owns companies ranging from the insurance giant GEICO to the BNSF railroad, as well as energy utilities, manufacturing operations, and retail businesses. It also has an investment portfolio that includes major holdings in Apple, American Express, and Coca-Cola.
That diversification doesn't eliminate risk, but it gives Berkshire multiple sources of earnings and cash flow, even when some parts of the economy are struggling.
Then there's the company's enormous cash position. In the company's second-quarter earnings report, Berkshire reported about $365.5 billion in cash and U.S. Treasury securities. Although some of that money is needed to support the insurance business, it also enables Berkshire to invest when attractive opportunities arise.
That's an important distinction. When stock prices fall, companies that need financing can find themselves in trouble. Berkshire, meanwhile, has the financial resources to purchase businesses or stocks at prices that may be considerably more attractive than they were during a bull market.
It's a strategy Buffett used for decades, and new Chief Executive Officer Greg Abel has emphasized that Berkshire will remain disciplined in how it invests shareholders' money.
Is Berkshire Hathaway stock a buy today?
Berkshire's lackluster performance in 2026 presents an interesting choice for investors.
The S&P 500 has continued climbing, while Berkshire has largely been on the sidelines. For investors seeking exposure to the market's fastest-growing companies, Berkshire may not look particularly appealing.
BRK.B data by YCharts
But Berkshire doesn't need a market decline to be a successful investment. Its collection of operating businesses, investment portfolio, and enormous financial resources can generate value over time, regardless of what the S&P 500 does in any particular year.
Still, with the S&P 500 enjoying another strong year and Berkshire stock taking a breather, investors have an opportunity to consider a company with a remarkable history of holding its own when markets struggle.
Berkshire may not be the stock that leads the market higher. But during the past six decades, it has frequently been the stock investors were glad they owned when the market headed lower.
The company that Warren Buffett guided for years didn't stick with its tried-and-true investment strategy of purchasing value stocks. Bending Spoons is a pricey growth equity.
Key Takeaways Berkshire Hathaway shares gained 6% in three months, while Allstate fell 5.6%, giving Berkshire an edge.BRK.B's 2026 EPS is projected to grow 5.9%, compared with 2.9% for ALL, with stronger estimate revisions.Berkshire's $370 billion-plus liquidity supports acquisitions, while Allstate focuses on profitable growth. Disciplined pricing, rising climate-related risks and accelerating digital transformation are expected to shape the insurance industry’s outlook in 2026. While growing catastrophe exposure remains a concern, prudent underwriting and pricing strategies should support profitability. However, abundant capacity and intensifying competition have contributed to moderating global commercial insurance rates.
Meanwhile, the Federal Reserve, under Chair Kevin Warsh, recently raised the benchmark interest rate by 25 basis points to 3.75%-4%, marking the first hike since 2023 after three consecutive cuts.
Against this backdrop, insurance heavyweights Berkshire Hathaway Inc. (BRK.B - Free Report) and The Allstate Corporation (ALL - Free Report) are expected to remain resilient. Additionally, increasing digital adoption could spur merger and acquisition (M&A) activity, particularly technology-focused transactions, as highlighted by Willis Towers Watson’s Quarterly Deal Performance Monitor.
Given these industry dynamics, which stock offers a more compelling investment opportunity for long-term investors? Let’s compare their fundamentals to identify the better pick.
Factors to Consider for BRK.BBerkshire Hathaway is a diversified conglomerate operating more than 90 businesses across insurance, energy, railroads, manufacturing, retail and consumer products. Its extensive business portfolio limits dependence on any single industry, providing earnings stability and resilience across economic cycles.
Insurance remains a cornerstone of Berkshire’s operations, contributing approximately one-fourth of total revenues. Disciplined underwriting, consistent premium growth and favorable pricing trends support the segment’s profitability. Moreover, Berkshire’s sizable insurance float, representing premiums collected before claims are settled, serves as a low-cost source of investment capital. This advantage enhances financial flexibility and supports long-term value creation through strategic investments and acquisitions.
Berkshire continues to optimize its investment portfolio to enhance income stability and geographic diversification. Increased investments in Japanese trading houses and airline-related businesses, alongside reduced exposure to select payment companies, reflect its evolving capital allocation priorities. The $6.8 billion acquisition of Taylor Morrison Home Corp. further highlights its focus on expanding exposure to the U.S. housing market and capturing long-term growth opportunities.
Berkshire’s financial position remains a key competitive advantage, backed by more than $370 billion in cash and U.S. Treasury holdings, conservative leverage and a robust balance sheet. Substantial liquidity gives the company considerable capacity to pursue acquisitions, capitalize on attractive investment opportunities and withstand economic volatility, supporting sustainable growth and long-term shareholder returns.
Factors to Consider for ALLAllstate is the third-largest property and casualty insurer and the largest publicly traded personal lines insurer in the United States. The company is undergoing a strategic transformation to improve cost efficiency, strengthen digital capabilities and expand distribution channels. Its auto insurance business has regained targeted profitability, while the homeowners segment continues to generate attractive returns, supporting overall underwriting performance.
Allstate is streamlining its portfolio to focus on core personal property-liability businesses, where it enjoys a strong competitive position and significant growth potential. By reducing exposure to less profitable operations and prioritizing higher-return businesses, the company aims to improve operational efficiency, strengthen margins and drive sustainable long-term earnings growth.
Meanwhile, Allstate is expanding its Protection Services segment to diversify revenues beyond traditional insurance offerings. Strategic acquisitions, including SquareTrade, PlumChoice, iCracked and Kingfisher, have strengthened its capabilities in device protection, home services and extended warranty solutions, creating additional growth opportunities.
Disciplined underwriting practices, improved pricing and effective expense management have supported net margin expansion over the past two years. However, persistent inflation, supply chain disruptions and rising vehicle repair costs associated with increasingly sophisticated automotive technologies could weigh on underwriting profitability. Elevated debt levels also remain a concern. Nevertheless, Allstate’s emphasis on profitable growth, operational efficiency and disciplined capital allocation positions it to strengthen its financial performance and enhance long-term shareholder value.
Price Performance of BRK.B and ALLShares of Berkshire Hathaway gained 6% in the past three months, while those of Allstate have lost 5.6% in the same time.
Image Source: Zacks Investment Research
Estimates for BRK.B and ALLThe Zacks Consensus Estimate for BRK.B’s 2026 revenues implies a year-over-year increase of 5.6% and that for EPS implies a year-over-year increase of 5.9%. EPS estimates have moved 0.7% northward over the past seven days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for ALL’s 2026 revenues implies a year-over-year increase of 5%, while that for EPS implies a year-over-year increase of 2.9%. EPS estimates have moved 0.3% southward over the past seven days.
Image Source: Zacks Investment Research
Are BRK.B and ALL Shares Expensive?Berkshire is trading at a price-to-book multiple of 1.49, higher than the median of 1.45 over the last five years. Allstate’s price-to-book multiple sits at 1.89, lower than its median of 2.17 over the last five years.
Image Source: Zacks Investment Research
ConclusionHolding shares of Berkshire Hathaway adds dynamism to shareholders’ portfolios. It is a diversified operating conglomerate supported by durable cash flows, financial strength and a proven reinvestment framework that has compounded shareholder wealth over decades. Investors are keen to see how the conglomerate fares under the leadership of its new CEO.
Allstate represents a compelling investment opportunity, underpinned by improved profitability through disciplined underwriting, ongoing digital transformation and a renewed emphasis on its core personal lines business. While short-term challenges such as inflation and elevated claims costs persist, the rebound in auto margins, increasing policy count, and a robust capital return strategy position the company well for sustained long-term growth.
Price performance, analyst sentiment and growth estimates keep BRK.B ahead of ALL. Berkshire with a Zacks Rank #2 (Buy) has an edge over Allstate, which carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Berkshire Hathaway Inc. (NYSE:BRK) on Wednesday expanded its investment in Italian technology portfolio company Bending Spoons S.p.A. (NASDAQ:BSP), committing an additional $330 million and increasing its ownership stake to 4%.
Bending Spoons stock is trading higher by more than 45% on Wednesday.
Berkshire’s Investment Reaches Close to $1 BillionThe fresh capital follows Berkshire Hathaway’s $600 million investment during Bending Spoons’ IPO in July 2026, bringing its cumulative investment to nearly $930 million.
Bending Spoons will issue 10 million ordinary shares at $33 per share through a private placement.
The purchase price represents a nearly 13% discount to Bending Spoons’ Tuesday closing price of $37.86.
The transaction that increases Berkshire’s stake to 4% makes the firm the sixth-largest investor in Bending Spoons, according to LSEG data, Reuters reported.
Transaction to Support Bending Spoons M&A StrategyThe investment will further enhance Bending Spoons’ financial flexibility and ability to pursue attractive acquisitions as part of its broader financing strategy.
The company specializes in acquiring, transforming and restructuring digital businesses, with a portfolio spanning software, digital media and online services.
Its portfolio includes Airtable, AOL, Brightcove, Eventbrite, Evernote, Tractive, Vimeo and WeTransfer.
Most recently, in September, the company announced its acquisition of Miro, an AI-first workspace provider, for $1.355 billion.
Bending Spoons held cash and cash equivalents of $793 million and had $1.28 billion of available borrowing capacity under its revolving credit as of June 30, 2026.
Co-founder and Head of Business Acquisitions Francesco Patarnello said the company continuously evaluates M&A opportunities and has a strong pipeline.
The investment follows as Berkshire Hathaway undergoes a leadership transition under CEO Greg Abel, who succeeded Warren Buffett earlier this year.
The conglomerate, in its second-quarter earnings in August, disclosed that its cash, cash equivalents, and short-term U.S. Treasury bills holdings shrank to nearly $360 billion from nearly $391 billion at the end of March.
BSP/BRK-B Price ActionBending Spoons shares were up 48.78% at $56.33 and Berkshire Hathaway shares were up 0.40% at $522.66 at the time of publication on Wednesday, according to Benzinga Pro data.
Bending Spoons shares BSP surged on Wednesday after Berkshire Hathaway invested another $330 million in the Italian technology company, bringing its total investment to $930 million and increasing its stake to approximately 4%.
The stock climbed 42% during Wednesday's trading.
The rally followed news that Berkshire, the conglomerate formerly led by Warren Buffett and now headed by CEO Greg Abel, had purchased additional shares in the company, which acquires and transforms digital businesses.
Bending Spoons will issue 10 million ordinary shares to Berkshire at $33 apiece through a private placement.
The price represents a discount to Tuesday's closing price of $37.86, even as the stock rallied sharply following the announcement.
The investment makes Berkshire the Italian company's sixth-largest investor, according to LSEG data.
Bending Spoons said the funds would strengthen its financial flexibility and support its acquisition strategy.
Berkshire invested $600 million in Bending Spoons' initial public offering in July before committing an additional $330 million.
The latest purchase brings its total investment to $930 million.
The market reaction suggests investors view Berkshire's participation as an endorsement of Bending Spoons' strategy of acquiring digital businesses and seeking to improve their performance.
The company has assembled a portfolio that includes AOL, Vimeo, Evernote, Brightcove, Eventbrite, productivity software maker Airtable, pet-tracking company Tractive and file-sharing platform WeTransfer.
In September, Bending Spoons also agreed to acquire Miro in a $1.4 billion deal.
The company continues to evaluate merger and acquisition opportunities and has a strong pipeline, according to Francesco Patarnello, its co-founder and head of business acquisitions.
Bending Spoons said the latest investment would provide additional financial flexibility as it pursues further acquisitions.
Despite Wednesday's surge, Bending Spoons trades at a substantial valuation relative to its projected financial performance.
The company has a market value of around $40 billion, based on the share count implied by its announcement, and had approximately $4 billion in debt at the time of its IPO, according to Barron's.
The stock trades at nearly 10 times forward sales based on enterprise value, which includes market capitalisation and debt. It also trades at around 30 times projected 2027 earnings.
Berkshire's investment could generate a substantial paper gain following Wednesday's rally.
Barron's estimated that the conglomerate was sitting on a profit of approximately $600 million after the stock's rise.
The $33 placement price also means investors buying after the rally are paying considerably more than Berkshire paid for its latest shares.
The investment comes as Berkshire has increased its exposure to technology companies under Abel, who took over as chief executive at the start of the year.
The conglomerate has also built a significant position in Alphabet, Google's parent company, which became its third-largest common stock holding. Berkshire's largest stock investments include Apple.
The shift towards technology marks a notable development for a company long associated with Buffett's value-investing philosophy.
Berkshire has historically favoured businesses trading at attractive valuations, including Japanese trading companies and homebuilder Lennar.
Bending Spoons' valuation contrasts with some of those traditional investments.
Its shares trade at nearly 10 times forward sales, while Berkshire's previous investments have often focused on lower earnings multiples or businesses trading below book value.
The latest purchase may therefore raise questions about how Berkshire is balancing its traditional investment approach with opportunities in technology.
Shares of Bending Spoons skyrocketed 35% after a new securities filing revealed that Berkshire Hathaway made a fresh $330 million investment into the company.
The latest infusion follows the conglomerate's $600 million investment from July, when the Italy-based serial acquirer went public on the Nasdaq.
Under the deal, Bending Spoons will issue 10 million ordinary shares to Berkshire at $33 a share.
"Bending Spoons continuously evaluates M&A opportunities, and our pipeline remains strong," said Francesco Patarnello, Bending Spoons' co-founder and head of business acquisitions, in a statement. "We believe Berkshire Hathaway's investment reflects confidence in our team and Platform and will further enhance our financial flexibility and ability to pursue attractive acquisitions as part of our broader financing strategy."
The investment now brings Berkshire's stake in the company to 4%, according to the filing, and is the conglomerate's latest investment decision as CEO Greg Abel took the helm from founder and legendary investor Warren Buffett at the start of the year.
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Bending Spoons said Berkshire has made a fresh investment of $330 million in the Milan-based company after plowing $600 million into its initial public offering in July.
Warren Buffett built a fortune through decades of expert stock picking, then told ordinary savers to ignore everything he knows. The reason why exposes a hidden cost most investors never calculate until it is far too late.
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Warren Buffett ran one of the most famous stock-picking operations in history, yet his advice to ordinary savers points away from stock picking. In his 1993 letter to Berkshire Hathaway (NYSE:BRK-B | BRK-B Price Prediction) shareholders, Warren Buffett argued that an investor who knows nothing about markets can outperform most investment professionals by investing periodically in an index fund.
Professionals have research teams, data terminals and decades of training. The claim still holds because of mechanics: Chase the pros and you could give up a six-figure difference over a working life.
Why Knowing Nothing Beats Trying Harder The S&P 500 is the market’s average. Active managers, taken together, own the market too, so as a group they earn that average before costs. After costs, the group has to trail it. The know-nothing investor earns the average minus almost nothing. Those costs pile up in four places:
1. Management fees: An active fund charges a yearly percentage of your balance whether it beats the index or lags it. A low-cost S&P 500 fund charges a fraction of that.
2. Trading costs: Every buy and sell carries spreads and commissions. An index fund trades only when the index itself changes.
3. Tax drag: Frequent selling in a taxable account realizes capital gains yearly, shrinking the compounding base. Buy-and-hold postpones most of that bill.
4. Behavior: People with strong opinions act on them, and each move is a fresh chance to be wrong.
Automatic contributions remove the last trap by taking timing off the table. The money moves on payday, picking up more shares when prices fall and fewer when they rise. Here is what one of those costs does on its own. Run the plan below with a 1% annual fee and the return drops from 9.5% to 8.5%. The ending value shrinks to about $413,000. The fee costs roughly $96,000, more than every dollar you contributed.
$250 a Month for 30 Years Grows to $508,000 The illustration uses $250 a month for 30 years, with an assumed constant annual return of 9.5% compounded monthly. The ending value is $508,000. The total money actually contributed is $90,000. Most of that balance is growth you never paid for. At year 20, the same plan holds about $178,000 on $60,000 contributed. The final decade does the biggest work because gains start earning gains of their own.
No real market delivers 9.5% every single year. Returns come in chunks, with strong years, flat years and painful ones. Treat $508,000 as a straight-line picture of how compounding works, and skip reading it as a forecast.
Where the Know-Nothing Plan Breaks Down Index funds protect you from fees and bad stock picks. Your sell button is the mistake that ruins the result. Picture year 20 of the plan. Your account holds about $178,000. A bear market cuts stocks by 40%. Within months, about $71,000 disappears and the balance sits near $107,000. That loss tops everything you contributed up to that point. Headlines will warn it could get worse.
Selling there locks in the loss and gives up the final decade, the stretch that produces most of the gain. Staying in, and still buying every month, is the entire job.
Low-Cost Funds That Put Buffett’s Advice to Work The Vanguard S&P 500 ETF (NYSEARCA:VOO) charges an expense ratio of 0.03%. Shares are about $711, up nearly 17% over the past year and about 324% over 10 years.
It paid $7.43 per share in trailing 12-month dividends, which a reinvestment plan rolls back into shares.
The SPDR S&P 500 ETF (NYSEARCA:SPY), the original S&P 500 ETF, charges about 0.09%. Both track the same index. Over decades of monthly contributions, VOO carries the lower fee of the two.
Berkshire Hathaway stock rose about 1% over the past year and 252% over 10 years, trailing VOO across both periods. It makes up 1.6% of SPY.
3 Habits That Keep the Know-Nothing Plan on Track 1. Automatic monthly purchases of a low-cost S&P 500 fund timed to payday remove the need for any decision.
2. Rerunning the 30-year math at a fund’s actual expense ratio shows exactly what fees take from the ending balance.
3. A written plan for a 40% decline, made in advance, is what keeps a saver contributing instead of selling.
The real test comes with the next bear market. Savers who keep monthly purchases running through it are the ones who collect the final decade’s compounding.
Contact [email protected] for any questions or corrections.
Greg Abel did not have an easy task when he was named the new CEO of Berkshire Hathaway (BRKA +0.40%)(BRKB +0.38%). Not only is Berkshire an incredibly large company to run, but Abel was stepping into the shoes left by none other than Warren Buffett.
Buffett previously ran Berkshire for six decades, transforming the company from a struggling textile manufacturer into one of the world's largest conglomerates. Buffett is also viewed as one of, if not the greatest, investors of all time, having generated terrific returns for Berkshire's massive $350 billion equities portfolio and the stock.
After nine months on the job, Abel has begun to make his mark, including on the equities portfolio. Let's take a look at what changes he's making, and which stocks are in and which are out.
Berkshire Hathaway CEO Greg Abel. Image source: Getty Images.
What stocks will be Abel's core, long-term holdings?
In his first letter to shareholders earlier this year, Abel began to lay out his vision for how he plans to run the company, including the stock portfolio. Interestingly, Abel listed four stocks he views as "core" to the company, and that will likely see "limited activity" moving forward, barring any changes to these companies' fundamental theses.
The four listed were Apple (Berkshire's largest holding), American Express, Coca-Cola, and Moody's. Abel also views the company's investments in Japan's five largest trading houses in a similar light.
But also interesting were the names Abel did not mention. He didn't mention Bank of America, which consumed over 7% of the portfolio at the end of the second quarter. In fact, Berkshire slightly trimmed its stake in Bank of America in the second quarter.
Abel also didn't mention Berkshire's large holdings in U.S. oil companies, including Chevron, which accounts for over 5% of the portfolio, and Occidental Petroleum, which accounts for 4.5%. Berkshire also owns 26.5% of Occidental's outstanding shares.
Berkshire has acquired several energy assets in recent years, and with Abel having run Berkshire Hathaway Energy, I thought there was a chance these two names would be long-term holdings. They still could be, but oil is very volatile, so perhaps Abel is not willing to commit just yet.
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It also looks like Alphabet has become a core position. Buffett initiated a position in Google's parent company last year, but under Abel's leadership, Berkshire has plowed tens of billions into the stock, which now accounts for 10.6% of the portfolio.
Alphabet is really the first artificial intelligence hyperscaler Berkshire has gone big on.
Other minor moves
Berkshire has made some other minor moves in the portfolio under Abel.
Berkshire initiated its stake in Delta, which now accounts for 1.3% of the portfolio. Following the pandemic, Buffett dumped all of Berkshire's airline positions, noting the industry had fundamentally changed. However, the airlines had been making strides in recent years due to pent-up demand and a greater reliance on add-ons, such as extra legroom. The Iran war has put a bit of a dent in the airlines because jet fuel is now so much higher, but the core thesis persists.
Berkshire has also increased its exposure to the housing sector by increasing its stake in stocks such as the major homebuilder and real estate company Lennar this year. High mortgage rates have crushed the housing sector in recent years. In the long term, this could be a good time to come in and play contrarian. Housing could bounce back if inflation slows and interest rates come down. It could also be intriguing down the line if the country finds ways to increase inventory, a move that seems to be desired by the broader public.
Finally, Abel has resumed share repurchases of Berkshire stock after the company had essentially been on pause in recent years. Now, some of this could be due to Berkshire sitting on hundreds of billions in cash.
While the market may have afforded Buffett that latitude, Abel may not receive the same luxury. After all, investors want to see at least some of that cash put to work. I think capital returns will need to be more prevalent under Abel's leadership.
Bank of America is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, American Express, Apple, Berkshire Hathaway, Chevron, Lennar, and Moody's. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.
Warren Buffett built a trillion-dollar empire yet left his wife's trustee a surprisingly simple set of investment instructions, and the math behind those instructions reveals a gap most investors never think to calculate.
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When an adviser gives strangers bad advice, the adviser pays nothing for it. When a man leaves instructions for his own family’s money, he lives with the results. Because of this contrast, one section in Warren Buffett’s 2013 shareholder letter carries more weight than any fund commercial ever made.
Buffett built Berkshire Hathaway (NYSE:BRK-B | BRK-B Price Prediction) into a company worth roughly $1.1 trillion. Yet when he spelled out how his wife’s inheritance should be invested, he gave the job to an index fund. Copy that plan with $300 a month and the example below grows your savings to about $610,000. Ignore the cost part of his instruction, though, and you could give up a six-figure sum of it.
What the Trustee Instruction Actually Said
Buffett wrote to the trustee about his wife’s inheritance. He said to put 90% of it into a low-cost S&P 500 index fund. The rest would go into short-term government bonds. He suggested Vanguard for the fund.
Most coverage skips the bond portion, but it has a clear job since someone living off a portfolio has to sell something every year to pay the bills. If stocks fall hard, the bond reserve covers spending, so shares don’t have to be sold at their lowest prices. That small piece protects the large one, giving the stock portion time to recover.
$300 a Month for 30 Years Builds a $502,000 Gap
Here is the example. Put $300 a month into an S&P 500 index fund for 30 years. Assume a constant annual return of 9.5%. The account ends at about $610,000.
You would have put in only $108,000 yourself. The other $502,000 comes from compounding, meaning growth earned on earlier growth. Most of that gain shows up in the final decade. Every year’s return is calculated on a bigger balance than the year before.
No real market returns 9.5% every single year. Actual returns swing between big gains and painful losses, so read the $610,000 as a straight-line picture of how compounding works, not as a forecast.
Why Buffett Insisted on Low Cost
An S&P 500 index fund owns the roughly 500 large U.S. companies in the index, weighted by market value. It doesn’t try to pick winners, so it doesn’t need to pay expensive analysts. The Vanguard S&P 500 ETF (NYSEARCA:VOO) charges an expense ratio of 0.03%. Over the past 10 years, its share price rose about 324%.
Fees come straight out of your return every year, so they compound against you the same way growth compounds for you. Take the same monthly plan, but say a 1% annual fee cuts into the 9.5% return (an simple example). Over the same period, you end up with about $495,000. That one percentage point costs you roughly $115,000, which is more than everything you added.
Time Horizon Decides Whether This Works for You
Buffett wrote this instruction for one person, and she would also have a very large estate behind her. A short market slump would never have put her rent at risk. Most readers lack that safety net, which makes your time horizon the deciding variable.
Cut the same plan to 20 years and you added $72,000, which grows to about $214,000 at the same constant rate. Missing those last ten years costs far more than the skipped deposits. The final decade is when compounding does its biggest work.
For money you’ll need within a few years, a 90% stock allocation is a real risk. One bad market could force you to sell low. The same goes if you have no emergency fund or other assets. The account type also matters. Inside an IRA or 401(k), dividends and gains grow without an annual tax bill, which keeps more money compounding.
Your Next Move Starts With One Transfer
1. Open the right account: Use a Roth IRA, a traditional IRA or your workplace 401(k) before a taxable brokerage account. That way, growth isn’t taxed every year.
2. Automate $300 a month: The plan works through a scheduled payday transfer into a low-cost S&P 500 index fund. Dividend reinvestment adds to compounding, and VOO, for example, pays quarterly.
3. Check every fund’s expense ratio: Look up the funds in your current 401(k). Any fund charging around 1% is on pace to cost you a six-figure sum over 30 years.
4. Build your bond reserve later: As withdrawals get closer, shift a piece into short-term government bonds. That reserve will fund spending during downturns, just as Buffett set up for his wife.
Buffett trusted a cheap S&P 500 fund with his own family’s money, and for anyone with decades of runway, that instruction is one of the clearest statements for low-cost indexing.
Contact [email protected] for any questions or corrections.
New partnership will allow advisors to leverage existing traveler and trip information in requesting travel insurance quotes
LINCOLN, Neb.--(BUSINESS WIRE)--Travefy, the travel industry’s most widely-adopted agency and advisor technology platform, is proud to announce a direct integration of Berkshire Hathaway Travel Protection (BHTP) into the Travefy platform slated for release in late 2026. BHTP is in a select roster of travel insurance providers to be the first to integrate into Travefy, giving advisors access to BHTP travel insurance within their existing workflow.
The BHTP integration provides a more seamless way to request a travel insurance quote.
Share “We’re thrilled to partner with an incredible brand like Berkshire Hathaway Travel Protection to connect their insurance products with our shared customers and invest further in growing agency sales production,” said David Chait, CEO of Travefy. "This integration connects best-in-class insurance products directly with Travefy users. Travefy has a unique strength to help drive and grow insurance sales with agencies, and advisors on our platform — as a seamless part of the workflow they already run, built around the preferred relationships and contracts they’ve already established.”
The BHTP integration provides a more seamless way to request a travel insurance quote eliminating duplicate data entry and making it faster for advisors to include travel insurance in their booking process.
“Travel advisors are looking for ways to make every part of the booking experience more efficient, and our collaboration with Travefy is designed to help them to make offering travel insurance a natural part of that workflow without requiring a separate process,” said Dean Sivley, President, Berkshire Hathaway Travel Protection. “By partnering with Travefy, we’re helping simplify the travel insurance experience by delivering a seamless quoting and purchase flow along with our reputation for fast, streamlined claims service where final claim decisions are always still made by people.”
Travefy plans to launch initial insurance integrations later this year.
To learn more, please visit https://travefy.com/.
ABOUT TRAVEFY
Travefy is the core platform for travel advisors, agencies, tour operators, DMCs, and host agencies who want to simplify their business and deliver a standout client experience. Founded in 2012 and trusted by more than 50,000 travel brands worldwide, Travefy provides itinerary management, proposals and quotes, CRM and custom forms, and website and marketing tools — and has been recognized by Inc. 5000 as one of America's fastest-growing companies for four consecutive years (2023-2026). Learn more at travefy.com.
ABOUT BERKSHIRE HATHAWAY TRAVEL PROTECTION
Berkshire Hathaway Travel Protection (BHTP) is a registered trademark and a subsidiary of Berkshire Hathaway Specialty Insurance Company, a leader in commercial property, casualty, liability and specialty lines insurance. Created under the Berkshire Hathaway Travel Protection trade name is the ExactCare® line of travel insurance, WaveCare®, AdrenalineCare®, LuxuryCare® and other travel-related protections. ExactCare® products are provided by Berkshire Hathaway Specialty Insurance Company. Visit bhtp.com for more information.
More News From Berkshire Hathaway Travel Protection
Warren Buffett handed Greg Abel the keys to a $1 trillion empire, but Berkshire is quietly sitting on a record cash pile while the market chases AI stocks. The setup forming right now may be one the Oracle himself would…
Warren Buffett stepped down as CEO of Berkshire Hathaway (NYSE:BRK.B) on December 31, 2025, after six decades of leading the conglomerate he transformed from a struggling textile mill into a $1 trillion empire. The “Oracle of Omaha” left his successor, Greg Abel, with a very concentrated portfolio: 77% of Berkshire’s $355 billion equity portfolio is invested in just seven stocks. Abel, who has served as vice chair overseeing non-insurance operations, officially took over as CEO on January 1, 2026. At 95, Buffett isn’t fully retiring, but he did recently step down as board chair and announced that his son, Howard, will take his place. Warren Buffett remains chairman emeritus.
While Berkshire Hathaway has erased some of its 2026 underperformance against the S&P 500, it still boils down to a few compounding and frustrating headwinds: a $365 billion cash pile earning T-bill yields while the market rallied hard, a deliberate retreat from equities at exactly the wrong time, and a leadership transition that shook investor confidence. Its sheer size makes transformative acquisitions nearly impossible, and its “old economy” focus on railroads, insurance, and energy meant it missed the AI-driven tech surge that powered index returns. Remember, the S&P 500 and the Nasdaq are up this year only because the technology sector outperformed. In short, Berkshire was penalized for being cautious and conservative, though for patient, long-term investors, that may ultimately prove to be a feature, not a bug.
Here are the five reasons why Berkshire Hathaway is my favorite stock for the rest of 2026 and beyond.
Gigantic Pile of Cash Berkshire Hathaway is still sitting on the largest cash pile in its history: $365.5 billion at the end of Q3 2026, equal to roughly 53% of its investable assets. Abel drove the cash drawdown from $397 billion largely by deploying capital, including a $4.53 billion stock buyback program. It’s still enough cash to buy 465 S&P 500 companies entirely. That massive reserve acts as a powerful safety net in a recession or market downturn, while giving CEO Abel tremendous flexibility to pursue attractive acquisitions or make bold capital investments in businesses Berkshire already owns. When the right deal finally appears, and it always does, this kind of financial firepower is truly exceptional.
Strong Earnings The company reported second-quarter results in August that beat consensus. Berkshire’s operating earnings rose 16.3% to $12.9 billion year-over-year. Net income soared to $25.6 billion. This isn’t accounting noise; it reflects genuine operational strength across Berkshire’s massive business portfolio. Total revenue reached a stunning $101.8 billion for the quarter. Net earnings totaled $25.7 billion. Third-quarter results are due on November 6.
Portfolio Built to Withstand Disruption Over the past 60 years, Berkshire has assembled a portfolio of operating businesses and investments that are remarkably resilient to disruption from AI and emerging technologies. Railroads, insurance, energy, and consumer staples form the core. These are classic businesses protected by wide, durable competitive moats that are unlikely to be upended overnight.
Buybacks That Have Started Berkshire ended its 21-month buyback moratorium because its shares finally became attractive enough to repurchase. The price-to-book ratio stayed at a strong 1.44, well below the 60% to 80% premium range that had kept buybacks on hold for nearly two years. Consistent with Berkshire’s long-standing policy, the company repurchases shares only when management believes the stock is trading below its intrinsic value. The resumption of buybacks therefore signals that they view the current price as undervalued. If they think it is, investors will, too.
The Right Man to Lead the Way Abel personally purchased $15 million of Berkshire shares. That amount is roughly equal to his entire after-tax annual salary. In addition, he has committed to repeating the buy each year. Given his decades-long tenure at the company, Abel is unlikely to make abrupt changes to Berkshire’s direction. However, his more active management approach could still unlock meaningful growth in the years ahead. Abel’s personal investment and commitment to cultural continuity send a powerful signal. A signal that will likely continue to resonate with investors for decades to come.
Berkshire Hathaway’s Wholly Owned Private Companies When you own shares, you own much more than the 26 companies in the stock portfolio.
Insurance
GEICO (auto insurance) General Re (reinsurance) Berkshire Hathaway Reinsurance Group Alleghany Corporation Kansas Bankers Surety Transportation & Logistics
BNSF Railway (one of the largest freight railroads in North America) FlightSafety International (pilot training) NetJets (fractional aircraft ownership) Energy & Utilities
Berkshire Hathaway Energy (parent of MidAmerican Energy, PacifiCorp, NV Energy, Northern Powergrid) Manufacturing & Industrial
Marmon Holdings (100+ industrial businesses) Precision Castparts (aerospace/industrial components) IMC International Metalworking Companies Acme Brick Company OxyChem, acquired in January 2026 for $9.7 billion — the most recent major addition Retail & Consumer
Dairy Queen See’s Candies Ben Bridge Jeweler Borsheims Fine Jewelry Nebraska Furniture Mart Building & Home
Benjamin Moore & Co. (paints) Clayton Homes (manufactured housing) Shaw Industries (flooring) Johns Manville (insulation/building products) Taylor Morrison (acquisition recently completed) Finance & Services
Berkshire Hathaway HomeServices (real estate brokerage) CORT Business Services (furniture rental) Berkadia (mortgage financing, 50% JV) Berkshire has a staggering 800 subsidiaries worldwide, but these are the flagship names that drive the bulk of operating earnings.
The Berkshire Hathaway shares are trading roughly 5% off their all-time high, sitting on a record cash pile, with buybacks just resuming and a new CEO who’s eating his own cooking. For long-term investors, that’s a rare combination. That said, always do your own due diligence before investing. With an overbought stock market and the AI/data center trade still ruling investor groupthink, this may be the best opportunity to own a legendary company.
Contact [email protected] for any questions or corrections.
Two ordinary Omaha natives handed a family friend a modest sum in 1961, never touched it, and watched it quietly become something that stunned even the people who knew them.
As Greg Abel succeeds Warren Buffett, an early bet shows what patience built. In 1961, Donald and Mildred Othmer each gave $25,000 to a partnership run by Buffett, an old friend from Omaha.
A Brooklyn Professor and a Former Omaha Teacher Donald joined the Polytechnic Institute of Brooklyn as a chemical engineering instructor in 1932. He headed the department from 1937 to 1961, became a distinguished professor in 1961 and became professor emeritus in 1976. By one account he never officially retired. He had worked at Eastman Kodak (NYSE:KODK), contributed to more than 40 patents and co-edited the Kirk-Othmer Encyclopedia of Chemical Technology.
Mildred was a former teacher and buyer for her mother’s dress store in Omaha. Both were Omaha natives with no children. The New York Times reported they “lived comfortably but not ostentatiously and rarely talked about their money.”, according to Reason
Donald died on Nov. 1, 1995, at 91. Mildred died in April 1998 at 90.
A Stake Left Alone for Decades When the partnership dissolved in 1970, the couple received about 14,500 shares of Berkshire Hathaway (NYSE:BRK-A | BRK-A Price Prediction) at $42 each, worth about $609,000.
When Donald died in 1995, Berkshire traded at just under $30,000 a share. His shares sold for about $210 million. By July 1998, the stock reached $77,000. Mildred held 7,500 shares, worth $578 million.
Combined estates totaled more than $750 million, with sources reporting $780 million to $800 million.
Buffett told the New York Times in 1998 that they “just rode along.” The investment “never changed their lives.” A broad market investment over the same period would have produced $50 million to $100 million.
Nearly All of It Went to Charity The gift figures also conflict. Glassman’s column puts the Brooklyn Polytechnic gift at $190 million, while Salon says $175 million. Glassman puts Long Island College Hospital’s gift at $160 million. For Planned Parenthood of New York, Glassman reports $75 million and Salon $65 million. Salon counts $340 million going to Brooklyn institutions in total.
Dividend Power lists about $140 million for the University of Nebraska-Lincoln, $125 million for the Chemical Heritage Foundation, $16 million for the Brooklyn Historical Society and $12 million for the Omaha Board of Education.
An Endowment Meant to Last Forever The wills directed $135 million to Long Island College Hospital as an endowment to be “held in perpetuity.” Administrators drew down the principal repeatedly with court approval. The hospital eventually closed, and nearly all the gift is gone.
A Result Nobody Could Plan Patience, one manager, and one company over three decades produced this.
Berkshire Hathaway Class A shares traded at $773,717.54 as of 10:48 AM ET on October 9, 2026, compared with about $77,000 in July 1998. Investors now watch whether Abel extends that run.
Contact [email protected] for any questions or corrections.
Charlie Munger beat the market for decades alongside Warren Buffett, then turned around and told ordinary savers to stop trying to do what he did. His reasoning exposes a costly mistake millions of investors make every year.
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Charlie Munger spent decades as vice chairman of Berkshire Hathaway (NYSE:BRK-B | BRK-B Price Prediction). Alongside Warren Buffett, he helped turn a concentrated portfolio of handpicked businesses into a company now worth about $1.1 trillion. Then he told everyone else to skip the game he had won.
“Most people should not do anything other than have index funds,” Munger said.
Munger, who died in November 2023, was one of the best stock pickers of his generation. He was telling ordinary savers to stop picking stocks. He was right: A saver who ignores that advice and tries to copy Berkshire will most likely end up with less money, higher costs and wasted effort.
Why Munger Called Stock Picking a Losing Game for Most Savers Concentrated investing works only if you understand a few businesses better than the market does and hold them through severe drawdowns. Munger and Buffett had the temperament, access, and decades of pattern recognition to pull that off. Most savers have a day job.
Every trade has someone on the other side, often a professional with a research staff, and before costs the market return is simply the average result of everyone in it. After fees and trading costs, the typical active investor lands below that average, but an index fund collects the average at almost no cost.
Berkshire’s own record shows the point. Over the past 10 years, BRK-B shares returned about 250%. The Vanguard S&P 500 ETF (NYSEARCA:VOO) returned about 326% over the same period. If one of history’s great investment vehicles fell behind the index, a part-time stock picker’s odds are worse.
$400 a Month Becomes $813,000 on Paper Here is what Munger’s alternative gets. Invest $400 a month for 30 years at an assumed constant annual return of 9.5%. The ending balance comes to about $813,000. Your deposits add up to just $144,000 of that. The other $669,000 is growth from compounding. Most arrives late: in the final decade, gains on earlier gains dwarf your monthly deposits.
Real markets never deliver the same return every year. A crash two years before you retire hurts far more than one in year three, because far more money is exposed. That is why the most important variable is whether you keep contributing through downturns.
A fixed $400 buys more shares when prices fall. That is dollar-cost averaging. Savers who stop during a crash skip the cheapest shares they will ever get, and compounding stalls.
What You Actually Own Inside VOO VOO tracks the S&P 500, about 500 of the largest U.S. companies. Vanguard’s expense ratio is 0.03%. On an $813,000 balance, that costs about $244 a year. A 1% fee on the same balance would cost $8,130 a year.
The fund covers large U.S. stocks in every sector, but it leaves out small companies, international stocks, bonds, and cash. Today a small group of giant technology names drives much of the fund’s movement.
Who Should Follow Munger’s Advice, and Who Should Adjust It If you have decades ahead, the math works. A crash becomes a discount on your next deposit. If you need the money within five years, an all-stock fund exposes you to a drop you may not recover from. That money is typically held partly in bonds or cash.
1. Automate the contribution: Set a fixed monthly transfer into a low-cost S&P 500 or total market fund. Then you never have to decide whether to keep buying during a selloff.
2. Audit your fees: Look up the expense ratio of every fund in your 401(k) and IRA. Compare high-cost funds against any index options your plan offers.
3. Stress-test the math: Run your own numbers in the SEC’s compound interest calculator at Investor.gov. Use a return a few points below 9.5% to see a more conservative outcome.
4. Fill the gaps, and do so deliberately: If you want small-cap or international exposure, add a separate low-cost fund instead of assuming the S&P 500 already covers it.
Munger’s lesson is clear. For most savers, low costs and decades of regular contributions build more wealth than trying to pick the next Berkshire.
Contact [email protected] for any questions or corrections.
Berkshire Hathaway just spent nearly $200 million buying into a homebuilder whose CEO admits conditions have deteriorated, margins are shrinking, and almost half of visitors can't qualify for a mortgage. What does Warren Buffett's successor see that the market clearly…
On Oct. 1 and 2, as mortgage rates rose toward a three-year high, Berkshire Hathaway (NYSE:BRK-A | BRK-A Price Prediction)(NYSE:BRK-B) bought roughly 2.42 million more shares of Lennar (NYSE:LEN) for about $193 million, according to a Form 4 filed with the Securities and Exchange Commission. Berkshire now holds about 29 million Class A and Class B shares, a stake of roughly 12% worth about $2.2 billion.
Days later, Freddie Mac put the average 30-year fixed mortgage rate at 7.40%, its highest since November 2023 and the seventh straight weekly increase. Lennar closed Friday at $76.68, down 33.23% over the past year, after Barron’s flagged its worst drop since 2024. Short-seller Hunterbrook has also published a critical report on Lennar’s transactions with Millrose Properties (NYSE:MRP).
Berkshire hasn’t explained the purchase. My read: it is buying a homebuilder engineered to survive a long slump, at a price that already assumes one (we sorted Berkshire’s holdings by valuation and pulled the cheapest dividend payers into a free report).
America’s Biggest Builder Is Bleeding Margin Lennar’s third quarter was rough. Revenue fell 8.5% to $8.05 billion, and adjusted EPS of $1.23 missed the $1.30 consensus. Net income dropped 51.96%. Gross margin on home sales slipped to 15.8% from 17.5% a year earlier, even with incentives near 12% of price. Management cut full-year deliveries to 80,000 to 81,000 homes.
Stuart Miller, Lennar’s chief executive, said conditions had “deteriorated since our last earnings call.” The buyer’s math explains why. The 10-year Treasury yield hit 5.22% this week, and consumer sentiment came in at 51.7. In many Lennar markets, “almost 50% of our visitors cannot immediately qualify.”
Why Lennar Owns Almost None of Its Land Land is what bankrupted builders in 2008. They bought lots at peak prices, then wrote them down when demand collapsed. Lennar owns roughly 2% of its homesites and controls about 476,000 through third parties, mainly land bankers such as Millrose. Homebuilding debt is just 16.6% of total capital.
That turns Lennar into something closer to a manufacturer. Build time fell to a record 116 days, and construction costs are down 14% since late 2023. Miller says the entire margin gap comes from land contracted under older, costlier assumptions. Accepting thin margins, he argued, “we are buying volume” and “buying time,” working through a land challenge that is “finite” and “visible.”
The weak spot is the same structure. Land-light still costs money: option fees are rising as land-bank holding periods stretch, and deposits and pre-acquisition costs have reached $7.3 billion. That is exactly where Hunterbrook aimed its criticism.
Signals That Will Test Berkshire’s Conviction Lennar guided fourth-quarter gross margin to 15.5% to 16.0%, with 19,500 to 20,500 new orders. That outlook assumed mortgage rates near 6.8%. Rates are now well above that.
Keep an eye on three numbers in the next earnings report. If orders land inside guidance with rates above 7%, the volume machine is doing its job. If margin slips below 15.5%, it means rates are hitting faster than Lennar can work off old land. And if deposits keep rising while land-bank purchases are paused, the off-balance-sheet risk is getting bigger instead of contracting.
Berkshire’s money tells you a patient investor likes the design. It does not tell you the housing market has hit bottom. For the families who can’t qualify today, the trigger is the same one Lennar needs: lower rates.
Contact [email protected] for any questions or corrections.
Are you new to the stock market? Maybe you're watching from the sidelines, looking for the right picks to start with. Or perhaps you're still just trying to learn the mechanics of buying a stock.
Wherever you are in your journey, I'm sure by now you've heard the virtues of owning an index fund like the SPDR S&P 500 ETF Trust (SPY -0.42%) or the Vanguard S&P 500 ETF (VOO -0.43%), both of which simply mirror the performance of the S&P 500 (^GSPC -0.47%) itself. This index is a proxy for the near-entirety of the stock market in that it holds stakes in 500 different stocks that make up more than 80% of the market's total value, which means while your position in an S&P 500 index fund will never beat the market, it won't underperform it either. You'll simply match its long-term average annual gain of 10%, with some years better than others.
I'd never deny that buying and holding a true "forever" position in an S&P 500 index fund is a little bit... shall we say, ho-hum? Picking a couple of individual stocks can make matters much more interesting.
To this end, I've got a batch of great all-around stock picks that would be ideal for new investors whether you want to add them to a portfolio that already holds an S&P 500 index fund or if you're starting with a blank slate.
But first things first. How does one actually start investing?
Getting started First and foremost, you will need a brokerage account or an individual retirement account (or IRA). These two different kinds of accounts are both capable of holding individual stocks, although the latter defers any taxation until money is withdrawn from them.
In many ways, investment accounts look and navigate much like ordinary online bank accounts, although they are distinctly different; most new investors aren't ready for the idea that one single account can hold multiple assets, including the cash that's needed to fund the purchase of a new stock pick. These accounts are also opened and funded much like checking accounts and savings accounts, with checks, or even online or wire transfers.
Although most major banks offer brokerage services, you will most likely want to utilize a reputable brokerage house like Charles Schwab or Robinhood, which charge little or nothing in fees for buying and selling shares. Their websites make it pretty easy to establish an account.
Image source: Getty Images.
As for buying -- and eventually selling -- a stock, the process is surprisingly intuitive. If you can navigate most websites, you can walk yourself through the process of trading stocks. Assuming you're trading online, once you're logged into your brokerage account or IRA, look for something like "trade," "buy," or "sell" on your navigation menu. To start, click on buy, and the platform will take you through the process by asking you how many shares of a particular stock you want to purchase. Don't worry! In almost all cases, the process will make sure you've got enough money in your account to pay for the trade. It will then double-check to make sure you've entered the numbers you intended to.
Once you're ready to sell a stock you own, just walk yourself through the reverse process, plugging in the number of shares you'd like to exit. Again, your trading platform will confirm your numerical entries with you before completing the transaction. Most platforms will also highlight potential problems, like not having enough funds to cover a trade or not actually owning enough shares of a stock you may be trying to sell.
That's it. If that's not intuitive enough, however, all online brokers offer very plain explanations on their websites of how their trade-entry screens work. You will still need to figure out which stocks you actually want to buy though, which can be done in a number of ways.
On that note...
Obviously I make no guarantees; all investments pose some measure of risk. There's a handful of stocks, however, that I think bring more potential upside than risk to the table, particularly at their current prices.
1. Alphabet Google parent Alphabet (GOOG -0.72%)(GOOGL -0.63%) is one of the biggest and highest-profile technology companies in the world. Its shares are sure to remain volatile. If you can be patient though, there's a long-term payoff for the obvious reason: Google remains the dominant name in web search. Search-based advertising alone accounts for more than half of Alphabet's total top line. And, all the Google-branded services combined -- including YouTube -- make up nearly 80% of the company's revenue. While Alphabet is making waves on the artificial intelligence (AI) front, the preferred gateway to the worldwide web remains its (highly profitable) breadwinning business. This business is clearly here to stay too.
2. GE Vernova GE Vernova (GEV +0.23%) isn't exactly a household name, but that's ok. I've found that sometimes something a bit off the radar is exactly what a portfolio needs.
First and foremost, yes, this is one of the offshoots of the iconic industrial conglomerate General Electric that finally broke itself up into smaller, more manageable pieces back in 2024. GE Vernova is the power-production branch of that sprawling outfit. It makes natural gas power turbines, wind turbines, and a range of other electrification solutions, including the software that manages it all.
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It's not a sexy business by any stretch of the imagination. In fact, it's a little bit boring. It's got teeth though. No matter how the world might change, we will always need cost-effective electricity.
This might help convince you: As of the middle of this year, GE Vernova's backlog of future business just waiting to be delivered and booked grew by $13 billion to $176 billion compared to revenue of only $11.1 billion for the quarter in question.
3. Berkshire Hathaway Finally, I'd suggest buying a stake in Berkshire Hathaway (BRKA +0.92%) (BRKB +0.95%) if you're a new investor and just getting started.
It's something of a cheat code. Rather than buying into a specific company's operation as you would with an individual stock, you're stepping into several, privately owned and publicly traded businesses, most of which were hand-picked by the brilliant Warren Buffett himself. Although he's no longer in charge, his philosophy still guides the organization's decisions and likely will for a long, long time.
Buffett's whole approach is extreme patience paired with extra-picky stock selection, of course. The thing is, it works. Although it's not been so hot of late, long-term, Berkshire shares have a track record of beating the broad market.
Warren Buffett once staked $1 million on a bet that shook the entire hedge fund industry, and the way he won exposes a hidden cost that most retirement investors are paying right now without realizing it.
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In 2007, Warren Buffett put up $1 million to back a simple claim. He said a plain S&P 500 index fund would beat a basket of hedge funds over 10 years. Protégé Partners took the other side. The contest ran the full decade and ended in 2017. Nobody called it early, and nobody changed the rules.
You have more at stake here than Buffett did. Pay a professional to beat the market. Trail it by a few points a year, and you give up a large part of your retirement balance.
A 4.9-Point Annual Gap That Compounded for 10 Years Buffett picked the Vanguard 500 Index Fund Admiral Shares, which returned 7.1% a year. Protégé’s hedge fund picks returned 2.2% a year. That works out to a gap of 4.9 percentage points a year.
A few points sounds small, but compounding makes the gap huge. Each year the index side earned returns on a bigger base, and that base grew faster than the hedge fund side’s. After 10 years the index side is far larger. Buffett’s prize money grew to about $2.2 million after a bond rally, and the money went to Girls Inc. of Omaha.
Why the Hedge Funds Lost: Two Layers of Fees Protégé chose five funds of hedge funds. A fund of funds is a manager that hires other managers, and you give your money to the top layer, which spreads it across many hedge funds below. Both layers charge you.
Hedge funds have long used a model called “2 and 20”. It involves an annual fee based on the assets they manage, plus a share of any profits. The fund-of-funds manager then adds its own annual fee on top, and sometimes takes its own cut of profits too.
Most investors miss how these fees work. The annual fee comes out every year, on every dollar, whether the manager adds value or loses money. Before the manager earns you a single dollar more than the market, they have to make up both layers of fees.
Profit fees make it worse. Say one hedge fund in the basket rises and another falls, and you pay a share of profits to the winner and still take on the loser’s losses. Spread that across dozens of funds, and you can pay profit fees even when your overall result is average.
An index fund has neither layer. It buys the whole market and charges almost nothing to do it.
What One Decade Can and Cannot Prove The hedge fund side deserves a fair hearing. This was one contest over one stretch of market history. The decade began just before the 2008 financial crisis, and U.S. large-cap stocks then spent most of the following years climbing.
Hedge funds often give up some upside to cushion crashes, and that trade-off loses ground when the market rises for most of a decade. A decade of flat prices or a long decline could narrow the gap. Some active managers do beat the index over certain stretches. This result says nothing about what the S&P 500 will return over the next 10 years.
The lasting lesson is about costs. Fees are certain and beating the market is uncertain, so an active manager has to overcome fees every single year. An index investor starts the race without that weight.
How to Own the Winning Side of Buffett’s Challenge Today The same market exposure is available through an ETF. Vanguard S&P 500 ETF (NYSEARCA:VOO) has an expense ratio of 0.03%. Shares trade near $712. Including dividends, the fund is up about 324% over the past 10 years.
SPDR S&P 500 ETF Trust (NYSEARCA:SPY) has been trading since 1993 and has an expense ratio of 0.09%. It costs more than VOO, but both are tiny next to two layers of hedge fund fees.
Even Buffett’s own company makes the point. Berkshire Hathaway (NYSE:BRK-B | BRK-B Price Prediction) Class B shares rose about 251% over the same 10 years. That trails VOO’s gain, and Berkshire already makes up about 2% of SPY.
Here is how to put this to work:
Look up every expense ratio you pay. Pull the fund list from your 401(k), IRA, and brokerage accounts. Compare each fund’s expense ratio to VOO’s 0.03%. Any fund charging many times that has to beat the market by at least the difference just to tie. Count your fee layers. If an advisor charges a percentage of your assets and then puts you in actively managed funds, you are paying two layers of fees, the same setup that brought down the hedge fund side. Run a cost comparison. FINRA’s free Fund Analyzer shows how fees add up over the years you plan to hold a fund. Run it on your most expensive holding next to an S&P 500 index fund. Judge results over full market cycles. Buffett’s challenge took 10 years to settle. Grade any manager by returns after fees over a full up-and-down cycle, and ignore their best single year. Buffett won by keeping costs close to zero. Every extra layer of fees you pay has to be earned back before you see a dollar of extra return.
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Trillion-dollar conglomerate Berkshire Hathaway (BRKA +0.23%)(BRKB +0.14%) entered 2026 in uncharted territory for the first time in more than half a century. On Dec. 31, Warren Buffett, the company's longtime CEO, who oversaw a greater-than-6,000,000% outperformance of the benchmark S&P 500 since the mid-1960s, retired as CEO. His successor, Greg Abel, is now in charge of Berkshire's $350 billion investment portfolio.
While the Oracle of Omaha had a knack for spotting amazing deals hiding in plain sight, he wasn't infallible. Decisions made in the years leading up to his retirement with No. 1 holding Apple (AAPL +0.91%) have cost Berkshire Hathaway up to $112 billion in would-be gains.
Image source: Getty Images.
The Oracle of Omaha dumped 75% of Berkshire's Apple stake before it nearly doubledWarren Buffett began building a position in the "Apple" of his eye in the first quarter of 2016. While artificial intelligence is all the rage today, Buffett was more interested in consumers' draw to the brand when he initially invested. Apple has an exceptionally loyal customer base that's shown a willingness to pay premium prices for its physical products (iPhone, iPad, and Mac).
By Sept. 30, 2023, Berkshire Hathaway's Apple stake had reached more than 915 million shares, worth $156.8 billion at the time, and accounted for well over 40% of the company's investment portfolio.
Then he began selling.
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At Berkshire's annual shareholder meeting held in May 2024, the Oracle of Omaha suggested that tax-based selling was behind his decision to pare down Apple. Said Buffett:
It doesn't bother me in the least to write that check... it shouldn't bother you that we do it, and if I'm doing it at 21% this year and we're doing it a little higher percentage later on, I don't think you'll actually mind the fact that we sold a little Apple this year.In other words, Buffett opined that corporate taxes would likely climb in the coming years and used this as a justification for paring down Apple at an advantageous tax rate.
The problem, in hindsight, is that Apple stock skyrocketed. The 687,642,574 shares Buffett sold in his final nine quarters as CEO (a 75% reduction) have cost Berkshire Hathaway up to $112 billion in gains.
Image source: Getty Images.
Buffett's Apple blunder is forgivable for one key reasonAlthough Berkshire Hathaway's now-former boss missed out on an even bigger payday for his company, I don't blame him one bit for selling three-quarters of the Apple stake. The reason? Apple violates the one rule Buffett hasn't wavered on in decades: valuation.
When Berkshire first began scooping up Apple stock, it was trading at a trailing 12-month price-to-earnings (P/E) ratio of just over 10. It was a bargain in every sense of the word and had exceptional customer loyalty/engagement to boot.
AAPL PE Ratio data by YCharts
As of Oct. 3, Apple was valued at almost 38 times forecast earnings for 2026. Not only is Apple historically pricey, but the stock market's valuation is within a stone's throw of rivaling the dot-com bubble. Even though Apple's higher-margin subscription services are an undeniable catalyst, the company simply isn't growing quickly enough to justify a forecast P/E ratio of 38 in 2026.
Warren Buffett was a net seller of stocks for 13 consecutive quarters leading up to his retirement because stock market valuations didn't make sense to him. I don't blame him one bit for selling 75% of Berkshire's Apple stake and remaining a stickler for value.
Selling appreciated stock and donating the cash feels like a clean, generous move, but Medicare scores your income at a step that comes before the charity deduction even appears on your return, and the gap between those two lines can…
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A 72-year-old retiree has held Berkshire Hathaway (NYSE:BRK-B | BRK-B Price Prediction) shares for decades. This fall he sells $100,000 worth of stock he bought for $10,000, then writes a check for the full amount to his church’s building fund. He assumes the gift wipes out the income Medicare sees. For his income tax bill, the gift helps. For Medicare, the $90,000 gain stays on his return, and it will raise his premiums two years from now.
The stakes depend on where your income sits. Only about 8% of people with Medicare Part B pay the income surcharge, called IRMAA. Joint filers start paying above $218,000 of income, and single filers above $109,000. If a stock sale still leaves you well under your line, the surcharge won’t reach you.
How the Sale Lands in Medicare’s Income Figure Social Security sets IRMAA using modified adjusted gross income (MAGI), which it defines as adjusted gross income plus tax-exempt interest. Municipal bond interest is tax-free, but it still counts. Selling appreciated stock realizes the capital gain and puts it into AGI.
The donation appears at a later step on the return. A charitable deduction generally occurs below AGI, so it lowers taxable income and leaves MAGI untouched. Medicare uses the number with the full gain still in it.
What the Gain Costs This Couple in 2028 IRMAA works on a two-year look-back: 2026 income sets 2028 premiums. Say he and his wife normally report MAGI of $200,000 on a joint return. Below $218,000, each pays the base $202.90 Part B premium plus their own Part D plan premium. With the gain added, MAGI rises to $290,000, which falls in the second tier ($274,000 to $342,000). Using 2026 tables as the example, since the 2027 and 2028 brackets aren’t set yet:
Choice 2026 Joint MAGI IRMAA Surcharge, Per Person, Monthly (Part B + Part D) IRMAA Surcharge, Per Couple, Annual Sell shares, donate cash $290,000 $240.40 $5,769.60 Donate shares directly $200,000 $0 (standard premiums only) $0 (standard premiums only) That surcharge includes $202.90 for Part B and $37.50 for Part D. It doubles each spouse’s Part B bill to $405.80 a month, and the household pays the same amount whether the money went to charity or into a brokerage account.
Why Form SSA-44 Won’t Rescue Him Form SSA-44 lets you ask for a lower IRMAA only when income drops after a qualifying life-changing event: marriage, divorce, a spouse’s death, stopping or cutting back work, loss of income-producing property, loss of pension income, or an employer settlement. A capital gain falls outside that list, no matter how much it raised MAGI. One more trap to keep in mind: if a spouse dies, the survivor files single, and surcharges start above $109,000, half the joint line. The same income can then land in a higher tier.
Give the Shares and the Gain Never Hits the Return Donating appreciated shares directly may avoid realizing the gain while still supporting the charity. For stock held more than a year, the deduction is generally based on fair market value and subject to a 30%-of-AGI limit for gifts to public charities. As of 2026, a new charitable-deduction floor also applies, so only contributions above 0.5% of AGI are deductible.
Amounts limited by the percentage rules can generally carry forward for up to five years. The key Medicare point stays the same: if he gives the shares instead of selling them first, the $90,000 gain never enters his MAGI (we walked through donor-advised funds, QCDs, and appreciated-stock gifts together in a free tax-smart giving guide).
Because he’s over 70.5, he also has another giving option: a qualified charitable distribution (QCD) from his IRA. In 2026, he can direct up to $111,000 through QCDs to eligible charities, and the qualified amount stays out of AGI.
Moves to Make Before December 31 If you haven’t sold yet, transfer the shares in kind. Ask your broker to send the shares directly to the charity or to a donor-advised fund. Confirm you’ve held them for more than a year before you start the transfer. If you already sold in 2026, a QCD cannot erase the gain. It can still keep a planned IRA distribution out of AGI if the money goes directly from the IRA to an eligible charity. That can help someone already close to an IRMAA line, but only by preventing additional taxable IRA income from piling on. IRA owners must be at least 70.5 to use a QCD. Check estimated MAGI before your next sale. If one sale would push you over a bracket line, spread it across two tax years or give part of the position directly. Charity can reduce the tax cost of generosity, but it cannot make a gain disappear after the stock has already been sold. Decide how you’ll give before you place the sell order.
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Key Takeaways Berkshire Hathaway's float reached about $177.5B by June 30, 2026, expanding its investment capacity.Profitable underwriting keeps float costs low, supporting investments and acquisitions that can add returns.Float reduces Berkshire Hathaway's reliance on shareholder capital or external borrowing to fund expansion. Berkshire Hathaway’s (BRK.B - Free Report) success is often linked to former CEO Warren Buffett’s ability to identify high-quality businesses at attractive prices. Equally important, however, has been the company’s use of insurance “float” as a powerful source of investment capital.
Insurance float represents premiums collected before related claims are paid. Berkshire receives cash upfront from policyholders, while claims may not be settled for months or even years. During that period, the company can invest the assets backing those future obligations across stocks, bonds and operating businesses. Importantly, float is not permanent capital, as Berkshire remains responsible for meeting policyholder claims when they arise.
This model becomes valuable when combined with disciplined underwriting. Profitable insurance operations generate float at a low cost, allowing Berkshire to deploy substantial capital into investments and acquisitions that can produce additional returns.
Berkshire’s float increased to about $177.5 billion as of June 30, 2026, from roughly $114 billion at the end of 2017, significantly expanding its investment capacity. This source of funding reduces the company’s dependence on shareholder capital or external borrowing while supporting continued expansion across its diversified businesses.
Insurance float is therefore far more than just an accounting concept. It is a structural funding advantage that has helped Berkshire compound capital over decades and become one of the world’s most formidable capital-allocation businesses.
What About BRK.B’s Peers?Chubb Limited (CB - Free Report) and The Travelers Companies (TRV - Free Report) are two other notable companies in the insurance space.
Chubb Limited’s disciplined approach to capital deployment emphasizes strong underwriting, prudent reserve practices and selective acquisitions to broaden its global presence and enhance specialty capabilities. Chubb also prioritizes long-term value creation through consistent shareholder returns via dividends and buybacks, while investing in technology and risk management to drive sustainable growth.
The Travelers Companies deploys capital prudently by focusing on disciplined underwriting, accurate risk assessment and data-informed pricing, ensuring stable profitability and financial resilience. Travelers drives long-term value through continued investments in technology and analytics, while consistently returning excess capital to shareholders via dividends and share buybacks.
BRK.B’s Price PerformanceShares of BRK.B have gained 0.4% year to date, outperforming the industry.
Image Source: Zacks Investment Research
BRK.B’s Expensive ValuationBRK.B trades at a price-to-book value ratio of 1.44, above the industry average of 1.38.
Image Source: Zacks Investment Research
Estimates for BRK.BThe Zacks Consensus Estimate for BRK.B’s third-quarter and fourth-quarter 2026 EPS has witnessed no movement over the past 30 days. The same holds true for 2026 and 2027.
Warren Buffett is arguably the greatest investor of this generation, and he leaves behind a celebrated legacy as he steps down as chairman of Berkshire Hathaway (BRKA +0.21%)(BRKB +0.06%), the holding company he built into a powerhouse, with nearly 200 operating businesses and a $350 billion equity portfolio.
Along the way, Berkshire Hathaway stock gained more than 5,500,000%, or a 19.9% annual compounded gain. That's nearly double the S&P 500's 10.4% annual compounded gain. Is there a chance for a repeat performance?
The new Berkshire Hathaway is the same as the old Berkshire Hathaway has been handed over to the capable hands of new CEO Greg Abel, who has been groomed for the role since he joined the company in 2018. So far, he hasn't made any significant changes to the model, although he slashed many of the smallest equity positions, which he had pledged to do before taking over. The other major change he has made so far is the acquisition of homebuilder Taylor Morrison, which was completed in July for $6.8 billion.
Image source: The Motley Fool.
Another recent development is a massive stake in Alphabet, though it was initiated in Buffett's time and isn't a deviation from the standard Berkshire Hathaway playbook.
Investors can expect similar deals, including major acquisitions when the financials look attractive and large stock purchases that fit the company's investment criteria. The stocks might differ, but they're likely to have a dominant market position, strong management, and strong cash flow.
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Will the stock follow? The stock isn't likely to provide similar gains, though. Berkshire Hathaway was a much smaller operation when Buffett took it over in 1965, and its growth over the past 60 years isn't repeatable. The same amount of growth in dollar terms translates into much less growth in percentage terms as the base gets larger. Investors reward percentage growth, which means Berkshire Hathaway stock isn't a growth stock anymore.
For example, in 1990, Berkshire Hathaway had $2.66 billion in revenue, and that increased to $34 billion in 2000. By 2020, it had ballooned to $246 billion, nearly 100-fold in 30 years. Its stock gained 900% over that time. It isn't possible to grow 100-fold again in the next 30 years, and its stock will reflect its growth.
The company is already showing signs of slowing down, and it has underperformed the market over the past three-, five-, and 10-year periods.
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Buffett acknowledged this in the 2023 shareholder letter:
There remain only a handful of companies in this country capable of truly moving the needle at Berkshire, and they have been endlessly picked over by us and by others. Some we can value; some we can't. And, if we can, they have to be attractively priced. Outside the U.S., there are essentially no candidates that are meaningful options for capital deployment at Berkshire. All in all, we have no possibility of eye-popping performance.
It can still provide value for investors, though. Abel and his team are likely to find great companies to buy and spot stocks trading at steep discounts, ensuring steady growth over many years.
