Buffett's Berkshire Hathaway Struggles Amidst Market Turmoil: Will a New Era Bring Relief?

Warren Buffett's Berkshire Hathaway has had a tough summer, lagging behind the market for the first time in five years. Despite this, the company has still delivered impressive returns since Buffett converted it from a textile company to an acquisition machine in the mid-1960s. Buffett, who turns 95 later this month, announced his retirement last spring by naming Greg Abel as his successor.

Warren Buffett's Berkshire Hathaway has had a challenging summer, with the company lagging behind the market for the first time in five years. Despite this, Berkshire Hathaway has consistently delivered impressive returns since Buffett converted it from a textile company to an acquisition machine in the mid-1960s. The legendary investor, who turns 95 later this month, announced his retirement last spring by naming Greg Abel as his successor [2].

The recent market underperformance has not deterred Buffett from pursuing strategic investments. Documents filed with the Securities and Exchange Commission (SEC) revealed that Berkshire Hathaway has made significant investments in homebuilders Lennar and D.R. Horton. During the first half of 2025, Berkshire Hathaway purchased over 7 million shares in Lennar, worth nearly $800 million. In the second quarter alone, the firm bought 5.3 million shares of Lennar for $575 million. Additionally, Berkshire Hathaway purchased 1.5 million shares in D.R. Horton during Q1 2025 for roughly $203 million [1].

These investments signal Buffett's confidence in the housing market, which is still millions of homes short in supply. The Trump administration's advocacy for deregulation in zoning and capital gains tax on home sales, along with Treasury Secretary Scott Bessent's focus on housing affordability, further supports Buffett's optimism [1].

Berkshire Hathaway's investments in homebuilders are part of a broader trend of investor focus on industrial resilience and sector rotation. Similar dynamics have played out across other markets, as evidenced by the surge in Japanese equities earlier this year and the strong corporate performances of companies like Deckers Outdoor [3].

The company's latest strategic positions also highlight Berkshire Hathaway's ongoing strategy to diversify its portfolio and invest in sectors offering long-term growth potential. The addition of steelmaker Nucor, homebuilders D.R. Horton, and Lennar to Berkshire's diverse portfolio could indicate a bullish sentiment on the construction and materials sectors, as well as the broader economy [3].

Under the leadership of Greg Abel, who will take over from Buffett as CEO in January, Berkshire Hathaway is expected to continue its disciplined investment approach. The company has $344 billion in cash as of June 30, which could be returned to shareholders via a dividend under Abel's leadership [2].

References:
[1] https://www.housingwire.com/articles/berkshire-hathaways-warren-buffett-bets-big-on-homebuilders/
[2] https://www.businessinsider.com/warren-buffett-analyst-berkshire-hathaway-dividend-cash-abel-retirement-succession-2025-8
[3] https://www.ainvest.com/news/warren-buffett-reveals-1-8-billion-secret-berkshire-hathaway-latest-13f-filing-2508/