Warren Buffett is closing his wallet. Berkshire Hathaway did not buy back any shares in the first nine months of 2025, even as the conglomerate’s cash pile swelled to a record $382 billion. This restraint underscores Buffett’s long-standing discipline: He only buys back Berkshire shares when he believes they are undervalued. Buffett explained his buyback philosophy in his 2018 annual letter to shareholders, saying he would only buy back Berkshire shares if they traded below his estimate of their intrinsic value and the company could then retain a sufficient cash cushion. The Oracle of Omaha has previously emphasized that Berkshire will use excess cash to buy back stock only when the discount makes sense, not as a way to prop up the stock price. Referring to his late business partner Charlie Munger, he wrote, “To summarize our thinking, Berkshire will only buy back its stock if a) Charlie and I believe the stock is selling for less than its value, and b) the company has sufficient cash remaining at the time the buyback is completed.” “Over time, we would like to see Berkshire’s stock count decline. If the price-to-value discount (which we expect) widens, we will likely become more aggressive in buying the stock. However, we do not intend to drive up the stock price at any level,” he added. Buffett typically enters the public market to buy Berkshire only if it sells at a discount of at least 15% to his valuation, UBS analysts said. When Berkshire first resumed share buybacks in 2018, the stock was undervalued by about 13%, according to UBS calculations. Berkshire, which owns Geico Insurance, BNSF Railway and Dairy Queen, has since become more aggressive as the gap has widened to about 20%. But there are currently no buybacks, even though Berkshire’s stock is down 12% from its high in early May, just before Buffett announced he would step down as CEO at the end of the year, ending his legendary 60-year reign. Class A stocks will rise only 5% in 2025, compared to the S&P 500’s 16.3% rise. But over the past six months alone, the underperformance is even greater, with Berkshire down about 11% versus the S&P 500’s gain of about 23%. Berkshire had soared to consecutive highs earlier this year as investors sought safety amid tariff-induced market turmoil and were drawn to the size and stability of its vast holding company. But as sentiment returned to risk-taking, Berkshire slumped, only to worsen with news of Buffett’s retirement plans. Despite the recent decline, Berkshire’s stock remains trading in line with its intrinsic value, leaving little incentive for share buybacks, UBS said. The Wall Street investment bank brilliantly predicted no share buybacks in the third quarter and said it doesn’t expect any buybacks until 2026. Nor does Berkshire stock look cheap even if book value, another valuation metric, is used instead of intrinsic value. Berkshire’s shares currently trade at nearly 1.6 times book value, but when Buffett eased his share buyback policy in 2018 and the market became more active, Berkshire’s shares sold for about 1.3 times book value, according to UBS. BRK.A YTD MOUNTAIN BERKSHIRE HATHAWAY CLASS A STOCK Year-to-date, Berkshire’s cash continues to accumulate, giving Buffett and his successor, Greg Abel, plenty of money to make trades and buy back stock in case the stock returns to what could be considered bargain territory.
