Warren Buffett, renowned investor and head of Berkshire Hathaway, showcases a unique approach to investing during economic downturns. This article explores his actions in the stock market over the past few years.
Periods of Stock Sell-Offs
Since 2022, Berkshire Hathaway has seen a period where stock sales outpaced purchases. In 2024, Buffett sold over 615 million shares of Apple (AAPL), reducing his stake by about 67%. Although these sales did not hit the peak price of AAPL, which were $258 at the end of 2024, they were executed at a higher price, yielding a gain. Proceeds from sales contributed to Berkshire's record cash reserve of $334.2 billion by the end of 2024.
Recession Odds for 2025
According to the latest data, the likelihood of a recession in the U.S. in 2025 has risen to 64%. This aligns with recent estimates from JP Morgan, which predicts a decrease in real GDP by 0.3% next year. Analysts suggest that the U.S. economy may face substantial changes due to the activity in trade policy.
Buffett's Strategy During Previous Recessions
During the Great Recession from 2007 to 2009, Buffett invested in sectors like healthcare and finance. He acquired shares in companies such as Goldman Sachs and Bank of America, as well as consumer goods and transportation firms. Importantly, Buffett has always aimed at creating value through dividend stocks, reinvesting earnings.
Warren Buffett continues to implement his unique investment approach, even as the market faces pressure. His actions during economic downturns serve as a model for other investors, highlighting the importance of long-term investment strategies.
