Is Warren Buffett’s recent $610 million move a positive sign for investors in 2025?

admin19/01/2025

0 0 4 minutes read

Investors often turn to Warren Buffett for advice for one good reason: He has proven that he can navigate all investment waters—from moments of euphoria to doldrums—and win over time. Buffett does not rush to buy the most sought-after stocks while the markets are rising and does not panic with selling during difficult periods. Instead, he invests in quality companies when the price is right and holds for the long term.

This strategy helped him lead Berkshire Hathaway to a total annual gain of more than 19% over 58 years — that compares with an increase of about 10% for S&P 500 index. So Buffett outperformed the market over time, earning him the nickname “The Oracle of Omaha.” And over the past few quarters, this oracle has taken steps that could be considered cautious.

Buffett was a stock seller, and Berkshire Hathaway’s cash flow reached record levels. That’s while the market rumbled higher, with the S&P 500 Dow Jones Industrial Averageand Nasdaq recording double-digit increases last year. The well-known investor even commented on the “casino-like behavior of the market” in his last letter to shareholders. But in recent weeks, Buffett has made a new move — and one that may offer a different message. Is Buffett’s $610 million move a positive sign for investors in 2025? Let’s find out.

Image source: The Motley Fool.

We usually have to wait for quarterly reports to find out which stocks Buffett bought and sold, since those trades must be reported to the Securities and Exchange Commission (SEC). on form 13F. The latest one was released in November and the next one will be available in February. Every US institutional investor with $100 million or more under management must fill out these forms, so Buffett clearly falls into this category.

But if those investors hold 10% or more of the outstanding shares of a particular company, they have to file a faster filing with the SEC, which is done on Form 4. This is how we know Buffett, in six trades in the past few weeks, invested $610 million in three shares.

Here are the details:

* On December 19, 2024, Buffett bought $409 million in the Occidental Petroleum (NYSE: OXY) shares.

* On December 19, 2024, Buffett bought $107 million in Sirius XM Holdings (NASDAQ: SIRI) shares.

* On December 19, 26 and 30, 2024 and January 3, 2025, Buffett bought more than $93 million in VeriSign (NASDAQ: VRSN) stock.

All this amounts to more than 610 million dollars poured into the stock market in a period of two weeks. These were not new additions, but companies already present in Berkshire Hathaway’s portfolio. Buffett originally bought VeriSign, a global provider of Internet registry services under .com and .net domains, back in 2012. He bought satellite radio provider Sirius in 2023 and oil and gas stocks Occidental Petroleum in 2022. So this was an example of a well-known investor seeing an opportunity to increasing positions in which he believes at reasonable prices considering the potential earnings.

Now back to our question. Is Buffett’s move to scoop up these stocks a positive sign for investors in 2025? It’s important to note that Buffett’s optimism about these particular stocks does not signal the direction for the entire stock market this year. Although Buffett has a thorough understanding of the market and the signs of potential gains or losses to come, he does not buy or sell stocks based on the direction in which the indexes will move. Instead, Buffett scrutinizes each stock — and if a buy looks solid, he’ll pick it regardless of what the general market is doing.

But we could still say Buffett’s move is a positive sign for investors in 2025. This means that whether indexes rise or fall, you can still, like Buffett, find bargains for quality stocks to add to your portfolio. Buffett didn’t construct his market portfolio in just one environment — instead, he looked for and found opportunities at any given time. Before making an investment decision, it is crucial to focus on the company’s valuation and business prospects for years to come.

And all of this means that investors could invest successfully and potentially be on their way to riches, regardless of the general market in 2025. That’s great news for investors in 2025 and beyond.

Before you buy shares in Occidental Petroleum, consider the following:

The Motley Fool Stock Advisor a team of analysts has just identified what it believes to be 10 best stocks for investors to buy now… and Occidental Petroleum was not one of them. Ten Stocks That Dimmed Could Produce Monster Returns in the Coming Years.

Think about when Nvidia made this list on April 15, 2005… if you invested $1000 at the time of our referral, you would have $818,587!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including portfolio construction guidance, regular updates from analysts, and two new stock picks each month. The Stock Advisor the service has more than quadrupled return of the S&P 500 since 2002*.

See 10 stocks »

*The stock advisor returns from January 13, 2025

Adria Cimino has no position in any of the listed stocks. The Motley Fool has positions in and recommends Berkshire Hathaway and VeriSign. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.

Is Warren Buffett’s recent $610 million move a positive sign for investors in 2025? was originally published by The Motley Fool

Source link