Warren Buffett’s $10-Per-Click Regret: Missing Out On Google

“I had seen the product work, and I knew the kind of margins [they had]. GEICO was paying them $10 or $11 per click, or something like that, and any time you’re paying somebody $10 or $11 bucks every time [someone clicks on a line] where you have no cost at all, that’s a good business. I knew the guys and … I had plenty of ways to ask questions and educate myself, but I blew it.” – Warren Buffett speaking about not buying Google (Alphabet) at the 2017 Berkshire Hathaway Annual Meeting.

Berkshire Hathaway’s (BRK/A, BRK/B) third-quarter 13F was filed after the market closed on November 14. This regulatory filing gives us a quarterly opportunity to observe what Warren Buffett, Greg Abel, and their investment team, Todd Combs and Ted Weschler, are doing within Berkshire’s publicly traded equity portfolio. Berkshire has a large stable of wholly owned entities, but this report provides details on the US publicly traded stock portion of its investments. Berkshire’s third-quarter earnings report, which contains information about the extensive portfolio of wholly-owned operating companies, was released on Saturday, November 1.

Berkshire Hathaway’s Top Ten Holdings

Berkshire’s $267.3 billion investment portfolio consists of 41 companies, unchanged from last quarter. Berkshire was a net seller of publicly traded stocks during the quarter. The top five holdings, in order of holding size, are Apple (AAPL), American Express (AXP), Bank of America (BAC), Coca-Cola (KO), and Chevron (CVX). The top 5 holdings account for 70% of the total portfolio. The investment portfolio remains very concentrated, with 87% of assets in the top ten holdings.

Berkshire Hathaway’s Portfolio By Sector

While Berkshire Hathaway had no change in its Apple (AAPL) position for the first quarter, it was trimmed again in the second and last quarter. Before the 2024 sales, Apple stock comprised over 50% of its publicly traded portfolio, but it remains the most significant holding at around 23%. The Berkshire portfolio was overweight technology due to its massive Apple stake, but the selling since 2024 has taken technology to an underweight.

Despite continued trimming of Bank of America (BAC) in the third quarter, the financial sector remains the portfolio’s most significant overweight at 41% of assets. Due to its top five holdings, plus Occidental Petroleum (OXY) and Kraft Heinz (KHC), the portfolio remains considerably overweight in consumer staples and energy relative to the S&P 500. Berkshire controls 26.9% of the outstanding shares in Occidental, which, combined with Chevron, leads to a significant energy sector overweight. A deeper analysis of the probable reasons behind the Occidental purchase can be found here. Berkshire continues to own no publicly traded utilities. However, Berkshire’s wholly owned entities include a large railroad, Burlington Northern Santa Fe (BNSF), and multiple regulated utilities and pipelines through Berkshire Hathaway Energy (BHE).

Portfolio Changes

In the third quarter, Berkshire added one new holding, Alphabet – Class A (GOOGL). With a value of $4.3 billion, Berkshire’s stake in Alphabet is its tenth largest position. Google is the leading internet search engine, with its revenues primarily generated by advertising. It hosts a vast array of businesses, including YouTube and Google Cloud. Google is also active in artificial intelligence (AI) with its Gemini platform, which has been integrated into Alphabet’s Chrome internet browser and search. Despite rising by over 46% year-to-date, Alphabet’s valuation is lower than many of its AI-related mega-cap technology peers. GOOGL trades at 25.5 times next year’s earnings, compared to Microsoft (32.0), Broadcom (50.8), Meta Platforms (21.3), and NVIDIA (41.9).

Berkshire added to its positions in Chubb (CB), Domino’s Pizza (DPZ), Sirius XM (SIRI), Lennar-A (LEN), Lennar-B (LEN/B), and Lamar Advertising-A (LAMR). Berkshire has usually had no real estate companies, but that changed in the second quarter with the purchase of Lamar Advertising-A (LAMR). Lamar is not a typical real estate company, though, as it owns and operates outdoor advertising.

Even as it added to other home builders, Berkshire eliminated its position in D.R. Horton (DHI). As noted previously, Berkshire reduced its positions in Apple (AAPL) and Bank of America (BAC). VeriSign (VRSN), Nucor (NUE), and Davita (DVA) were also trimmed. Notably, Berkshire entered into an agreement with DaVita in 2024 under which DaVita will buy back shares quarterly from Berkshire when its stake exceeds 45%.

Portfolio Valuation Metrics

This analysis looks at the Berkshire portfolio across a host of measures, including 12-month forward estimated: price-to-earnings (P/E), price-to-sales (P/S), return-on-equity (ROE), enterprise value-to-earnings before interest, taxes, depreciation, and amortization (EV/EBITDA), price-to-book (P/B), dividend yield, current debt-to-EBITDA, current free cash flow yield, current operating margin, and long-term earnings-per-share growth consensus estimates.

Overall, the Berkshire portfolio analysis reflects a cheaper price-to-earnings valuation than the S&P 500 while having superior returns on capital as measured by return on equity with similar debt levels. The long-term (next 3 to 5 years) consensus earnings-per-share growth rate is expected to be lower than the S&P 500. Notably, Buffett’s preference for high-quality companies that generate significant cash flows is evident in their superior return on equity and exceptional free cash flow yields.

Summary

Berkshire was a net seller of $6.1 billion in publicly traded stocks in the third quarter, the twelfth straight quarter of Berkshire Hathaway’s net sales of stocks. Berkshire bought $6.4 billion of stocks while selling $12.5 billion. Driven by earnings and continued stock sales, Berkshire has amassed a massive cash pile on both an absolute and a relative basis. Buffett and his associates have been unable to find enough attractive acquisition targets in his circle of competence and at a valuation he is willing to pay. Perhaps the purchase of Alphabet (GOOGL) signals a widening of the circle of competence into technology, as Buffett had previously said about missing Google that “I didn’t know enough about technology to know whether this really was the one that would stop the competitive race.” It seems most likely that Todd Combs and Ted Weschler were the driving force behind the purchase.

Berkshire’s price-to-book ratio remained elevated during much of the third quarter, so share repurchases were suspended. Berkshire only intends to repurchase shares when the “repurchase price is below Berkshire’s intrinsic value, conservatively determined.” The price-to-book ratio remains a reasonable proxy for gauging Berkshire’s intrinsic value. The stock repurchases in the first quarter of 2024 were likely done at around 1.4-1.5 times book value. Berkshire’s stock reached almost 1.8 times book in May 2025, so a lack of repurchases in the quarter wasn’t unexpected. Since the stock market became more volatile at the end of October, Berkshire shares have outperformed by a wide margin, while still trailing the S&P 500’s return year-to-date. Berkshire’s price-to-book value of 1.6 times is likely too high for stock repurchases, but its downside risk should be less than most other companies, given its massive cash pile, which allows it to buy back shares in large quantities should the valuation recede.

Disclosure: Glenview Trust holds Berkshire Hathaway (BRK/A, BRK/B) and other stocks mentioned in this article within its recommended investment strategies. I am a long-time Berkshire Hathaway shareholder and worked for Salomon Brothers when Warren Buffett became Chairman and CEO.