Warren Buffett Out of BID: How, Where, and Why the 'Oracle of Omaha' Invests

Berkshire Hataway, the holding company owned by the ninety-five-year-old billionaire, has always invested differently from all other investors: the sales are creating a reputational crisis

Warren Buffett sells his stake in BYD , and the Chinese electric vehicle brand plummets on the stock market. Why do the Oracle of Omaha's decisions carry so much weight? For a simple, yet peculiar, reason, in an increasingly global and schizophrenic global financial market. Berkshire Hathaway , the holding company headed by the ninety-five-year-old billionaire, has always invested differently than all other investors: an investment philosophy based on long-term value bets on the solidity of the companies it selects for its portfolio. This is why a complete divestment, like the one involving BYD, becomes a wake-up call for the entire market.

The equation that drives down the value of stocks is simple: Buffett divests, meaning he no longer sees the prospect of value creation . In BYD's case, this occurs on an investment that lasted seventeen years, during which the allocated capital appreciated more than twenty times its initial value.

The Oracle of Omaha , a nickname he earned through decades of farsighted investing and a nod to his hometown in Nebraska, has never pursued quarterly stock performance or short-term earnings. Instead, he has always chosen reliable companies, companies with strong, stable cash flows.

Not only that. Buffett has also always accepted the risk of holding more cash than he deemed advisable, rather than embarking on investments that do not offer real opportunities. Another element that makes Berkshire Hathaway's strategy unique is the choice to concentrate capital in a limited number of stocks, in contrast to the conventional approach that favors broad diversification. Here too, we are going against the trend and bordering on heresy, considering the standards of the conventional investor. It can all be summed up in one of his most famous quotes: "The first rule of investing is never to lose money. The second rule of investing is never to forget the first rule. There are no other rules." And the results have almost always proved him right: Buffett's investments have produced a compound annual return of 20% between 1965 and 2024 .

According to the latest filing with the SEC, these are the ten most prominent stocks in Berkshire Hathaway's portfolio in the United States: Apple 24.1%; American Express 18.4%; Bank of America 11.3%; Coca-Cola 10.1%; Chevron 7.2%; Occidental Petroleum 4.7%; Moody's 4.7%; Kraft Heinz 3.3%; Chubb Limited 2.7%; DaVita 1.6%.

Stocks of solid companies, which can boast the trust of Buffet and his managers. But which, like BYD and starting with Apple, the stock that has captured nearly a quarter of Buffet's portfolio, could face a reputational crisis if that trust were to wane. (By Fabio Insenga )