Warren Buffett Has Never Looked This Bearish

When Warren Buffett began selling off Berkshire Hathaway’s (NYSE: BRK-B)  stakes in Apple and Bank of America to load up on cash, Wall Street took notice. Buffett’s accumulation of cash and his rare departure from his standard “buy and hold” strategy sent bearish red flag alerts to traders and investors around the world. While many are speculating about what the “Oracle of Omaha” is planning, the steps that Warren Buffett has taken and has set in motion may reflect other concerns apart from the stock market.

A Mountain of Cash

Sitting on a roughly $344 billion cash and short term Treasury bond war chest, Buffett decided to stay on the sidelines during the initial April market drop and subsequent bounce back when President Trump’s reciprocal tariff policies were first announced. Berkshire’s Q2 results showed that the company was still a net seller of stocks, buying $3.9 billion, but selling $6.92 billion. With Buffett’s favorite S&P 500 index making new highs, his decision to refrain from capitalizing on a substantial buying opportunity has left fans and followers puzzled, but still loyal. Many of them are awaiting announcement of the next big Buffett move, with emulation often the end result. 

$3.76 Billion Write-Down of Kraft Heinz

Although Berkshire Hathaway maintains a 27% stake in Kraft Heinz, it has finally written down the investment, a long overdue move on one of Buffett’s rare miscalculations. The write-down diminished operating earnings ($430 million), although the year-over-year disparity between total earnings ($17.87 billion) seems much larger because of the paper gains from the 2024 Apple stock sales. Analysts have wondered why there was such a long delay in acknowledging the losses.

Railroad Challenges

A recently announced merger proposal between Union Pacific Railroad and Norfolk Southern Railroad has also created competition concerns for Berkshire Hathaway’s BNSF railroad. Although BNSF is the largest US railroad, the prospect of rivals Union Pacific and Norfolk Southern supplanting BNSF has led some to suggest that Berkshire should acquire Eastern Rail CSX. However, in addition to potential antitrust issues from the FTC, Buffett is notoriously averse to buying companies unless he can get them at a bargain price. BNSF is doing excellent business, with a 19% profit increase reported, and CSX is trading at a 52-week high, which is prohibitively expensive for the thrift-minded Buffett. 

Internal Challenges

The state of the economy, geopolitical events and tariffs leaves Berkshire Hathaway vulnerable. “The pace of changes in these events, including tensions from developing international trade policies and tariffs, accelerated through the first six months of 2025,” the 10-Q report reads. “It is reasonably possible there could be adverse consequences on most, if not all, of our operating businesses.” 

The 10-Q also noted that after-tax operating profit fell 4% in the second quarter vs. last year to $11.2 billion. This was due to $877 million in foreign exchange losses due to Berkshire’s U.S.-dollar debt. Without that, its operating profit would have risen 8%. Buffett is justifiably concerned about the impact of US tariffs on Berkshire businesses. The multinational nature of many of those wholly owned subsidiaries’ supply chains, manufacturing, shipping, and other aspects of their operations subject to potential tariff impact are such that a complete estimate is still a question mark.

Additionally, the reaction from the Apple and Bank of America stock sales added uncertainty to Berkshire Hathaway, which has already seen investor preferences shifting towards technology, AI, and other sectors with more sizzle and short term, upside potential.  As such, the company, which habitually leaves the S&P 500 behind in its rear view mirror, has underperformed Buffett’s favorite stock index in the last 4 out of 7 years. From a technical analysis perspective, Berkshire stock’s 50- and 200-day moving averages are drifting precipitously towards “bearish” territory.

Succession

The question of succession had been one that concerned many Berkshire Hathaway shareholders in recent years. At over age 90, and with partner Charlie Munger recently passed away in 2023, Buffett finally nominated Vice Chairman Greg Abel to succeed him as CEO in December 2025, while Buffett continues as Chairman. 

Several analysts and financial journalists think that the cash war chest and clearing of baggage like Kraft Heinz is Buffett’s way of giving Abel a clean slate from which to build his own string of stock market and private company wins for the benefit of Berkshire shareholders. 

Buffett Still Has His Touch

Until Warren Buffett officially steps down from day-to-day operations and stock picking, he is still a formidable investor that has proven he hasn’t lost his touch. Just a few months ago, in a May 15 SEC filing, Berkshire Hathaway reported it owned 1,162,088 shares of Florida based aerospace and electronics company Heico Corp (NYSE: HEI). In May, Heico was trading in the $268 region. At the time of this writing, it is at $337.56.

Berkshire Hathaway may appear to be in the doldrums, but there are some clues that there is a method to the madness. While Berkshire may not have the capacity to make incredible bull runs in short time spans like Nvidia, the conglomerate is still highly profitable each year. Therefore, what may appear to be bearishness on Buffett’s part may actually have a more wily underlying rationale for the future.

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