Warren Buffett's Berkshire Hathaway portfolio poised for strong performance, favoring Treasury bills over S&P 500
From Nasdaq: 2025-06-29 10:00:00
Warren Buffett’s Berkshire Hathaway continues to outperform the S&P 500 in 2025, despite his retirement announcement affecting share premiums. His portfolio includes various investments in businesses, equities, private issues, and bonds, showcasing his investing prowess. Buffett’s analysis indicates that one of his major holdings is positioned for strong performance in the near future.
Buffett has been selling off major marketable equity holdings like Apple, Bank of America, and Citigroup. Valuation challenges seem to be the primary reason behind these sales, with the price-to-earnings ratio of Apple increasing significantly since Buffett’s initial investment. Berkshire has been consistently selling stocks for 10 quarters, accumulating over $174 billion in excess of purchases, with a focus on short-term U.S. Treasury bills.
Government bonds are seen as a low-risk investment option compared to equities due to a low equity-risk premium and ongoing geopolitical uncertainties. Proposed regulatory changes and the Genius Act supporting stablecoins backed by U.S. Treasuries further enhance the appeal of Treasury bills. While Buffett prefers equities, short-term factors currently favor Treasury bills over the S&P 500.
Investors are advised to consider the short-term factors influencing Treasury bills’ appeal, as the equity risk premium may not remain low for long. While Buffett leans towards equities, smaller investors may find better value in small- and mid-cap stocks. The S&P 500 may not offer attractive opportunities at present, but smaller companies could present compelling prospects for investment growth.
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