Warren Buffett has long cautioned investors against paying too much for stocks, and he has recently criticized the state of the market. His company, though, appears to be acting differently from the way that message might suggest. Berkshire Hathaway has been putting more money into shares, not less.
The buying has come under Greg Abel, who formally took over as chief executive from Buffett at the start of the year. Since then, Berkshire has built up its holding in Alphabet, the parent company of Google. The stake is now one of the five biggest common stock positions in the portfolio. Apple, the maker of the iPhone, remains at the top of that list.
The size of the increase is notable. Berkshire more than tripled its Alphabet holding, a sign that Abel and his team see real value in the technology giant despite broader concerns about how expensive the market has become.
Alphabet was not the only target. Berkshire also bought more than $2.6 billion worth of Delta Air Lines shares. Airlines are a notable choice because the industry has a reputation for being difficult and unpredictable, and Buffett himself has been skeptical of it in the past. The purchase suggests Abel is willing to make his own decisions rather than simply follow the path Buffett laid out.
The contrast between Buffett’s comments and Berkshire’s actions is not necessarily a contradiction. A person can believe the market as a whole is pricey and still find individual companies worth owning at their current prices. Berkshire has also long been known for picking specific businesses rather than trying to time the entire market.
For investors, the moves offer an early look at how Berkshire may operate in the post-Buffett era. Abel appears ready to deploy the company’s money into large, well-known businesses, even when the overall market looks expensive.