
Warren Buffett, the CEO of Berkshire Hathaway, has made several important changes in his investment strategy in 2025. Due to changing market conditions, he has adjusted his portfolio by selling stocks, increasing cash reserves, and investing more in Japanese trading houses.
In 2024, Berkshire Hathaway sold more shares than it purchased. Berkshire Hathaway sold $143.4 billion in stocks but only bought $9.2 billion of shares. It carried on that way to the fourth quarter of 2024, extending nine consecutive quarters of selling more stocks than purchasing.
Berkshire also disposed of all its holdings in S&P 500 ETFs from State Street Global Advisors and Vanguard, each valued at approximately $22 million. Consequently, its cash holdings hit a record high of $334.2 billion as of the end of 2024. Most people believe this indicates that Buffett is forecasting a stock market crash. Nevertheless, Buffett has explained that much of Berkshire's money remains invested in stocks.
Another of Buffett's major actions in 2025 was raising Berkshire's interest in Berkshire Hathaway Energy (BHE). The firm acquired an 8% interest in BHE from the Walter Scott estate for $3.9 billion in cash. This transaction left Berkshire as the 100% owner of BHE.
Interestingly, this acquisition estimated BHE at $49 billion, significantly less than its last estimate of $87 billion in 2022. The analysts attribute the lower price to risks resulting from wildfires and stringent rules. Nevertheless, Buffett is famous for striking good bargains, and this action consolidates Berkshire's presence in the energy industry.
Buffett has also been expanding Berkshire's holdings in Japan. The company now has $23.5 billion invested in shares of five large Japanese trading firms:
Itochu
Marubeni
Mitsubishi
Mitsui
Sumitomo
These firms are engaged in diverse sectors, including commodities, shipping, and steel. Buffett has been permitted to raise his stake above 10% in all these firms. He intends to hold on to these stakes in the long run, even post-retirement, with his successor, Greg Abe, continuing the same strategy.
Berkshire will earn $812 million in dividend revenue from these investments in 2025. Berkshire has issued yen-denominated bonds to mitigate currency risks, so the company is not concerned about fluctuations in exchange rates.
In his letter to shareholders, Buffett said he is holding out for a sharp decline in the stock market before investing more of Berkshire's $334.2 billion cash hoard. He thinks wild fluctuations in the market could occur soon, as they did in previous crashes, such as the dot-com bubble or the 2008 financial crisis.
Some experts, like Bill Smead, think Buffett’s strategy means he is preparing for a major bear market. They advise investors to be ready for economic challenges, including inflation and financial instability.
Despite selling $134 billion worth of stocks in 2024, Buffett still prefers owning businesses rather than holding too much cash. He has also warned that inflation and government spending could cause problems for the economy.
Warren Buffett’s investment decisions in 2025 show he is cautious yet smart. By keeping more cash, making strategic purchases, and investing in international markets like Japan, he is preparing for future opportunities. His strategy ensures that Berkshire Hathaway remains financially strong and ready for any market changes.