Buffett sends a warning to investors, but make sure you understand what his purchase says.
Warren Buffett is one of the world’s most respected investment managers. His record of tracking, dating all the way back to the 1950s, is hard to argue with. As Buffett Limited’s partnership manager, he provided an annual compound returning more than 25% for investors. And since taking it Berkshire Hathaway (BRK.A 0.75%)) (BRK.B 0.73%)) In 1965, he has produced an annual return at 20% in the last 59 and half years.
Despite the Berkshire stock rising 25.5% in 2024, beating S&P 500Shares could have done better if Buffett made several different investment decisions. In particular, Buffett oversaw the sale of at least $ 134 billion in equality in 2024, and that is before the end of the fourth quarter (Q4) was known. Meanwhile, Buffett’s shareholding for the first nine months of the year reached a total of only $ 5.8 billion.
Many see the huge sales of Buffett stock as a warning to investors that the stock is overwhelming now. But there is a clear reason why Buffett’s stock sales have reduced its purchase recently. Buffett once again focused on the market area where he feels there is great value and his recent purchase. In particular, he bought shares in two companies – a purchase that was about $ 200 million at the end of December and early January. Here’s a true message investors should take away from Berkshire’s 2024.

Picture Source: Motley fool.
Buffett’s recent investment
Between December 17 and January 3, Buffett and his team of investment managers in Berkshire Hathaway made several investments. We know about them because the company was forced to report by the Security and Sale Commission (SEC) as more than 10%. Here’s a purchase and how much Berkshire is paid:
- 8.9 million shares of Normal gasoline ($ 409 million).
- 5 million shares of Sirius XM (Mystery -0.77%)) ($ 107 million).
- 474 thousand shares of Verisign (VRSN 1.97%)) ($ 94 million).
Berkshire owns preferred stock of ordinary gasoline and permits to buy a common stock for $ 59.62. Slowly retires those shares and permits, so it’s a kind of surprise Berkshire Hathaway not buying more shares at less than that price.
Two other purchases, Sirius XM and Verisign, show the broader design of Berkshire Hathaway in 2024. In particular, it is not a big company. Sirius XM has a $ 7.5 billion market like this writing. Verisign value is more than $ 20 billion. And that could be why Berkshire only managed to get $ 200 million in the open market recently. The company may have wanted to buy more but could not.
It is worth marking the price of the verisign stock increased 5.3% at Berkshire purchase when the S&P 500 fell 2.2% in the same period. A combination of Berkshire purchases that increases prices and its exposure to create an investor’s excitement around the name that contributed to significant stock improvement.
The biggest challenge facing Warren Buffett and Berkshire Hathaway
Early in the year, Buffett bought shares of Domino pizza ($ 15 billion market) ,, Pool Corp. ($ 13.5 billion), and HEICS ($ 29 billion). Even occidental has a market of $ 47 billion.
The fact that Buffett sees the most valuable in the shares of a small company poses a challenge to him and Berkshire Hathaway. If Buffett decides to sell AppleHe can easily finish a company worth $ 75 billion of $ 3 trillion-together. He did so only in Q2 last year. But getting the right stock again that $ 75 billion is an impossible task.
Buffett warned investors about the situation at the beginning of the year in his letter to shareholders:
There are still only a few companies in this country capable of moving needles in Berkshire, and they have been completely taken by us and others. Others we can appreciate; Some we can’t. And, if we can, it must be an attractive price.
At this point, the biggest company in the market is not very interesting from the math comment. “Seven Magnificent” is currently seven major companies and markets. They have a joint price-to-income (PE) ratio of 29.8. The largest banks in the world have seen their book-to-bend-bearing prices that appear to rise higher in the last 18 months, which caused Buffett to start selling Berkshire’s Bank of America stock. Buffett even stopped buying Berkshire Hathaway shares in Q3, meaning he sees his company’s stock as being overthrown.
A small company, on the other hand, can still present great value. Sirius XM, for example, is trading with an estimate of the Analysts agreement 7.4 times in revenue 2025. Verisign and Domino business for almost 24 times revenue. And if you look at even the smallest companies, many businesses for the best inventory. The S&P 400 mid-cap Figure contains a total of 16.3 as of this writing. Small-cap S&P 600 trades in front revenue 15.8 times.
The problem for Berkshire Hathaway is that it can only buy a small-middle-central company without moving the market. The individual investor, on the other hand, can buy as many shares of these companies if they want.
The clear investors of messages should take
Warren Buffett’s large stock sale and small purchases in 2024 are not a warning to investors from outside stock as soon as possible. It’s more subtle. Investors just need to be more diligent in appreciation of the shares they buy, and more and more of the best values ​​in the market are a small company.
That’s not very surprising. The stock market collection reached unusual rates at the end of 2024, the larger companies grew bigger, leaving the whole market back. But as revenue increases with large stock-cap has expanded over the past few years, investors have not expanded the same expansion to small businesses-even “small businesses” worth $ 25 billion.
There are many opportunities in small stock and center cap. Buffett seems to prefer valuable stocks, of which S&P 400 and S&P 600 prefer because of the profitability requirements of being included in the indices. If you do not have the direction of individual stock research, you can consider the Index funding to monitor the S&P indices on your portfolio.
Bank of America is a partner of Motley Fool’s money advertising. Adam Levy has a place in Apple. Motley fool has a place inside and recommends Apple, Bank of America, Berkshire Hathaway, Domino Pizza, and Verisign. Motley fool recommends heico and regular gasoline. Motley fool has a disclosure policy.
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