Investors often turn to Warren Buffett for advice for one good reason: He's proven his ability to navigate any investing waters -- from moments of euphoria to the doldrums -- and win over time. Buffett doesn't rush to buy the hottest stocks as markets soar and doesn't panic-sell during difficult periods. Instead, he invests in quality companies when the price is right and holds on for the long term.
This strategy has helped him lead Berkshire Hathaway to a compounded annual gain of more than 19% over 58 years -- that's compared to an increase of about 10% for the S&P 500 index. So, Buffett has outperformed the market over time, earning him the nickname "the Oracle of Omaha." And over the past several quarters, this oracle has taken steps that could be seen as cautious.
Buffett has been a seller of stocks, and Berkshire Hathaway's cash has reached record levels. This is as the market roared higher, with the S&P 500, the Dow Jones Industrial Average, and the Nasdaq posting double-digit increases last year. The famous investor even commented in his latest shareholder letter about the "casino-like behavior" of the market. But in recent weeks, Buffett made a new move -- and one that might 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.
Buffett's latest buys
We usually have to wait for quarterly reports to find out which stocks Buffett has bought and sold, as these trades must be reported to the Securities and Exchange Commission (SEC) on Form 13F. The latest came out in November, and the next will be available in February. Any U.S. institutional investor with $100 million or more under management must file these forms, so Buffett clearly falls into this category.
But if these investors hold 10% or more of a particular company's outstanding stock, they have to issue a filing more quickly with the SEC, and this is done on Form 4. This is how we know that Buffett, in six operations over the past few weeks, invested $610 million in three stocks.
Here are the details:
* On Dec. 19, 2024, Buffett bought $409 million in Occidental Petroleum (OXY 1.09%) shares.
* On Dec. 19, 2024, Buffett bought $107 million in Sirius XM Holdings (SIRI +1.91%) shares.
* On Dec. 19, 26, and 30, 2024 and on Jan. 3, 2025, Buffett bought more than $93 million in VeriSign (VRSN +1.11%) stock.
Adding to long-term positions
All of this totals more than $610 million poured into the stock market over a period of two weeks. These weren't new additions, but companies already present in the Berkshire Hathaway portfolio. Buffett originally purchased VeriSign, the global provider of internet registry services under the .com and .net domains, back in 2012. He bought satellite radio provider Sirius in 2023 and oil and gas stock Occidental Petroleum in 2022. So, this was an example of the famous investor seeing an opportunity to add to positions he believes in at reasonable prices considering earnings potential ahead.
Now, let's get 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 doesn't signal a direction for the entire stock market this year. Even though Buffett thoroughly understands the market and signs of potential gains or losses to come, he doesn't buy or sell stocks according to what direction indexes may be about to take. Instead, Buffett closely examines each stock -- and if the buy case looks solid, he'll pick it up no matter what the general market is doing.
But we still could say Buffett's move is a positive sign for investors in 2025. It means that, regardless of whether indexes rise or fall, you still could, like Buffett, find bargains on quality stocks to add to your portfolio. Buffett didn't construct his market-beating portfolio in just one environment -- instead, he's searched for and found opportunities at any time. It's key to focus on valuation and the company's business prospects in the years to come before making an investment decision.
And all of this means that no matter what the general market does in 2025, investors could successfully invest and potentially set themselves off on the path to wealth. That's great news for investors in 2025 and beyond.
