Warren Buffett says he's still making investments for Berkshire Hathaway

Berkshire bought $17 billion of U.S. Treasury bills this week and held more than $370 million in cash equivalents at end-2025; the firm sold more equities than it bought in Buffett's final quarter, trimming Apple and Bank of America stakes while increasing positions in Chevron and Chubb and starting a small New York Times holding. Since Buffett announced his planned exit, BRK-A/BRK-B are down about 11% while the S&P 500 is up over 13%; Buffett (95) says he still goes to the office, remains involved in investment decisions, and made one 'tiny' new purchase after handing CEO duties to Greg Abel on Jan. 1.

Analysis

Succession-driven repricing is creating transient dispersion between headline conglomerate equity and its underlying asset mix; the market is treating governance uncertainty as a multi-quarter structural discount rather than a liquidity-driven repricing. That amplifies volatility in the conglomerate’s largest, most liquid holdings (mega-caps and big banks) as algorithmic funds and active managers rebalance, producing outsized slippage for blocks sold into thin windows.

Large, coordinated demand for ultra-short government paper by a very large allocator has second-order effects across front-end markets: it pins short yields, increases funding competition for deposit-like instruments, and raises the opportunity cost of keeping cash on bank balance sheets. For banks and regional lenders this creates a two-way pressure — deposit beta rises while wholesale funding costs tick down unpredictably — compressing NIMs unevenly across institutions.

From a flow/microstructure angle, the mechanical consequence of a giant owner reallocating is an options-volatility dislocation in its top holdings: realized selling pressure lifts near-term implied vols, creating asymmetric short-gamma opportunities for sellers of premium while buying longer-dated convex hedges remains cheap. Time horizon matters — days-weeks for gamma capture, quarters for mean-reversion in sentiment, and 12–36 months for fundamentals to reassert themselves.

The consensus mistake is extrapolating headline governance noise into permanent operational deterioration. The active-management capacity, capital base, and franchise value don’t vanish overnight; that argues for selective, size-constrained trades that monetize short-term flow chaos while keeping convex exposure to an eventual normalization in multiple and liquidity premium.

Key Decisions for Investors

• Long CVX (6–12 months): buy a 6–12 month bull-call spread (delta-positive, defined risk) sized 1–2% NAV. Rationale: favors cash-flow resiliency and dividend optionality if energy multiple re-rates; target +20% upside, hard stop -10%. Reward ~2–3x downside risk on spread cost.
• Insurance vs. Bank pair (3–6 months): long CB stock + short BAC (equal dollar notional, size 1–2% NAV). Rationale: expresses a tilt into lower deposit beta businesses vs rate-sensitive lending; expect outperformance of insurers if front-end funding competition persists. Cut if pair diverges >7% adverse within 30 days (reassess macro).
• Short near-term volatility on large-cap holdings (30–45 days): sell 30–35 delta call and put spreads (iron condor) around AAPL-sized mega-cap names to collect inflated premium, max loss defined by strike width. Rationale: algorithmic rebalancing and block selling spike front-month vols that mean-revert quickly. Keep position size small (0.5–1% NAV) and close into any >1.5% mean reversion in underlying.
• Convex hedge on conglomerate equity BRK.B (9–12 months): buy an out-of-the-money call spread or long-dated call (size 0.5–1% NAV) as a contrarian play against overdiscounting of management transition. Rationale: captures mean-reversion if sentiment stabilizes; acceptable asymmetric payoff with limited premium spend.
• Speculative long NYT (6 months): buy calls sized as a tactical micro-cap squeeze (0.25–0.5% NAV). Rationale: idiosyncratic liquidity and earnings leverage can magnify small inflows; target 2–3x, stop 50% loss to preserve portfolio convexity.