The Only Stock Warren Buffett Is Clearly Buying Right Now

On March 4, 2026 Berkshire Hathaway resumed share repurchases with CEO Greg Abel confirming the buybacks and stating he consulted Warren Buffett; the company held $373 billion in cash, cash equivalents and short-term investments at end-2025. Management says buybacks will occur only when shares trade below conservative estimates of intrinsic value, and the move — Abel's first major capital allocation decision as CEO — is motivated in part by rising oil prices, a weakening economy and potential inflation resurgence. The buyback program signals a shift toward deploying dry powder to repurchase stock rather than hold U.S. Treasuries and may meaningfully support Berkshire's shares and investor sentiment.

Analysis

Management choosing to deploy large liquid balances into the company’s own equity establishes an explicit valuation fence: buy activity will compress available float and mechanically boost per-share metrics when triggered, and it also converts interest-rate sensitive Treasury exposure into realized corporate ownership optionality. That filter creates asymmetric upside for long holders in market dislocations but also reduces the firm’s duration hedge versus rising yields — the portfolio becomes less rate-hedged as Treasuries are monetized.

The tactical consequence for markets is flow reallocation: a major, persistent buyer of private and public assets bidding at conservative multiples will push price discovery in mid-market M&A, reinsurance blocks, and asset sales, making private valuations less attractive to other buyers and increasing competition for scarce quality deals. Simultaneously, re-rating pressure may accrue on long-duration/high-multiple growth names as capital rotates toward a lower-beta, cash-generative conglomerate.

Key tail risks are macro-driven and binary: a rapid, multi-hundred-basis-point move higher in real yields would widen the opportunity cost of equity repurchases and could force redeployment back into shorter-duration liquid assets, reversing the valuation floor; conversely, a market shock that widens spreads could allow accelerated, high-IRR buys and create outsized shareholder returns. Watch cadence and size of future purchases as the primary catalyst for re-rating over quarters to years.

Key Decisions for Investors

• Core long: Build a 2–4% portfolio position in BRKB for a 12–36 month hold. Add on 5–10% pullbacks; target total return +25–40% driven by EPS accretion and selective deal wins. Hedge with 9–12 month 10% OTM puts (cost = insurance) to cap downside to ~10–12% while retaining upside exposure.
• Relative value pair: Long BRKB / Short NVDA (size 1:0.3) for 6–18 months to capture rotation from high-multiple secular growth into capital allocators. Expect payoff if sector multiple mean-reverts or if BRK executes accretive deployments; risk is NVDA upside run — cap that by buying a cheap long-dated NVDA call to limit tail losses.
• Income overlay: Sell 9–18 month covered calls on an existing BRKB stake to harvest buyback-driven realized volatility and generate 3–6% annualized premium. Use staggered expiries to avoid forced exit into market dislocations.
• Event monitoring trade: Keep a 1–2% nimble cash sleeve to add on any regulatory filing or 10-Q disclosure showing stepped-up cadence of repurchases (execute within 3 trading days). This has asymmetric upside in stressed markets; set hard stop-loss at -12% from entry to control drawdowns.