There's been considerable volatility in the market, and in conditions like this, investors often look for guidance from experts. There are few investors more people look up to than Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) CEO Warren Buffett.

Every three months, investors get to find out what stocks Berkshire Hathaway has bought and sold for its portfolio. It's a great window into the mind of Buffett and his peers at Berkshire, and it can be a plentiful source for stock ideas even when the overall market isn't performing the way you want. Below, we'll look at some of Buffett's moves and what they mean to the companies involved.

Berkshire CEO Warren Buffett at a conference, with people behind.

Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.

How the stock market fared Tuesday morning

Stocks gave up a portion of their gains Tuesday morning, as the Dow Jones Industrial Average (DJINDICES:^DJI) and S&P 500 (SNPINDEX:^GSPC) retreated from record closes on Monday. Enthusiasm about a potential coronavirus vaccine gave way to the sobering realization that it could still take a while for a successful vaccine to make a difference in the pandemic's toll.

As of 11 a.m. EST, the Dow was down 240 points to 29,711, and the S&P fell 17 points to 3,610. The Nasdaq Composite (NASDAQINDEX:^IXIC) had the smallest loss, easing lower by 8 points to 11,916.

What Buffett bought

Warren Buffett has always been an optimist, and in the third quarter of 2020, Berkshire made some big purchases. Most notably, the insurance giant focused on pharmaceutical stocks, seeing them as untapped value plays that have a lot of long-term promise.

Buffett added shares of Merck (NYSE:MRK), Bristol-Myers Squibb (NYSE:BMY), Pfizer (NYSE:PFE), and AbbVie (NYSE:ABBV) to the Berkshire portfolio. At just $136 million, the Pfizer position was much smaller than the other three, which earned roughly equal allocations in the $1.8 billion to $1.9 billion range as of Sept. 30.

Buffett followers will see the purchases as the moves of a classic value investor. All have extremely low forward earnings multiples, based on an expectation of a solid comeback from pandemic-related impacts to their bottom lines.

Less in line with typical Berkshire picks were purchases of T-Mobile US (NASDAQ:TMUS) and Snowflake (NYSE:SNOW). We already knew about the Snowflake buy, which Buffett made in conjunction with the data cloud company's IPO. The T-Mobile stake of almost $320 million looks like a play on the emergence of 5G wireless technology, which is igniting another round of competition among major U.S. wireless carriers.

A muted Buffett effect

At one time, news that Buffett was interested in a stock would've sent its share price soaring. But that generally wasn't the case Tuesday morning following the Berkshire announcement. Most of the drug stocks that Buffett added are up, but none by more than 3%. T-Mobile stock is up just over 1% on the day.

Some of that likely owes to Berkshire's own lackluster performance. The stock has trailed the S&P 500, and that's prompted Buffett to boost buybacks of the company's own shares in recent months.

Investors can nevertheless count on Buffett getting a lot of attention with his picks. The Berkshire CEO's long-term track record earns respect, and it's always interesting to see what the Oracle of Omaha is doing with Berkshire's capital in anticipation of a bull market ahead.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.