The recent stock market collapse, instigated by President Donald Trump’s global tariffs, casts Warren Buffett’s investment strategies over the past year into a new perspective, underscoring his cautious approach during the once-thriving bull market. His decision to divest a significant portion of Berkshire Hathaway’s Apple stock last year is now viewed as particularly well-timed.
Warren Buffett, the Chairman and CEO of Berkshire Hathaway, has seen his investment decisions from the past year appear prescient following the market turmoil caused by President Trump’s global tariffs.
In just two trading sessions, the S&P 500 experienced a 10% decline, with the broad market index down 17% from its peak in mid-February. Meanwhile, the Nasdaq and the small-cap Russell 2000 have entered bear market territory, falling more than 20% from their recent highs.
Following Trump’s “Liberation Day” announcement, U.S. stocks have lost over $6 trillion in market value in the worst selloff since the early days of the COVID-19 pandemic in 2020, as Wall Street anticipates a recession induced by tariffs.
Buffett appeared to foresee a downturn, as evidenced by Berkshire’s sale of $134 billion in equities in 2024, while the bull market was still strong, and the company’s cash reserves reached a record $334 billion by year’s end—nearly double from the previous year and surpassing its shrinking stock portfolio of $272 billion.
A proponent of value investing, Buffett has long remarked on high valuations, refraining from major acquisitions due to a perceived lack of bargains.
Berkshire’s substantial cash holding, primarily in short-term Treasury bills, provides a safe haven amid market volatility and yielded noteworthy gains, as Buffett highlighted in his recent letter to shareholders.
In addition to acquisitions, Buffett’s timely sales during the new market landscape are notable. Last year, Berkshire reduced its Apple stake by about two-thirds, which constituted the bulk of the company’s equity sales, though Apple remains its largest stock holding.
These sales occurred during the first three quarters of the year, while Apple shares were still rising, peaking in late December. However, since reaching that peak, Apple’s stock price has fallen by 28% as U.S. tariffs on China are expected to have a significant impact. The iPhone maker relies heavily on China for parts and manufacturing.
With Trump’s latest tariffs, imports from China now face a 54% duty, and should the administration impose a “secondary tariff” on countries purchasing oil from Venezuela, rates could reach 79%.
Meanwhile, Berkshire has also been reducing its holdings in Bank of America and Citigroup, with shares of both financial giants down approximately 22% this year.
Conversely, Berkshire’s class B shares have gained 9% this year, despite experiencing a slight decline recently. The diverse portfolio of businesses within Berkshire, which includes insurance, rail, and energy, are primarily domestic and less affected by imports.
Consequently, Buffett’s personal wealth has grown this year, contrary to many of his peers. According to the Bloomberg Billionaires Index, his net worth has increased by $12.7 billion, resulting in a total of $155 billion, positioning him at No. 6 on the list, essentially tying with Bill Gates, whose fortune decreased by $3.38 billion.
Elon Musk maintains the top position with $302 billion, though his wealth has decreased by $130 billion in 2025, followed by Jeff Bezos with $193 billion, down by $45.2 billion.
As analysts anticipate whether the recent market downturn will encourage Buffett to make a substantial acquisition or stock investment, his February letter offers some insight.
“Warren Buffett assured Berkshire shareholders that a substantial majority of their funds will always be deployed in equities—primarily American equities, although many may have significant international operations,” he wrote. “Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned.”
This story was originally published on Fortune.com.
