Warren Buffett's Berkshire Hathaway Invests in Historically Cheap Stock Despite $177 Billion Warning

Warren Buffett's Berkshire Hathaway has seen a cumulative return of over 5,900,000% in the last 60 years, outpacing the S&P 500's 42,500% gain. Despite being a net seller of stocks for 11 consecutive quarters, Buffett has found one historically cheap industry leader worth investing in, with a 32,000% gain since its IPO. The Oracle of Omaha is known for his optimism on America and the stock market, but values a good deal above all else. With the S&P 500's Shiller P/E ratio hitting its third-priciest multiple when back-tested 154 years, Buffett is sending a silent warning to Wall Street.

Warren Buffett's Berkshire Hathaway has seen a remarkable cumulative return of over 5,900,000% in the last 60 years, significantly outpacing the S&P 500's 42,500% gain. Despite being a net seller of stocks for 11 consecutive quarters, Buffett has recently found one historically cheap industry leader worth investing in, UnitedHealth Group, which has seen a 32,000% gain since its IPO [2].

Buffett's investment philosophy is rooted in optimism about America and the stock market, but he remains steadfast in his pursuit of value. The S&P 500's Shiller P/E ratio, a valuation metric Buffett favors, recently hit its third-priciest multiple when back-tested 154 years, indicating that the stock market is historically pricey [2]. This has led Buffett to sell $177.4 billion more in stock than was purchased over the past 11 quarters [2].

Despite this, Buffett's 13F filing revealed that he oversaw the purchase of 5,039,564 shares of UnitedHealth Group stock during the second quarter, worth about $1.57 billion. This investment was driven by a more-than-halving in the stock's price over two months, presenting an opportunity for Buffett to capitalize on the price dislocation [2]. UnitedHealth Group has faced challenges such as higher-than-anticipated Medicare Advantage expenses, a probe by the U.S. Justice Department, and the resignation of its CEO, but the company has consistently delivered for investors and possesses strong competitive edges [2].

Buffett's investment in UnitedHealth Group demonstrates his willingness to wait for price dislocations and his preference for companies with a proven track record and sustainable moats. His investment strategy is a testament to his unwavering belief in the value of a good deal and his optimism about the long-term potential of the stock market.

References:
[1] https://www.reuters.com/business/buffett-shoots-down-talk-berkshire-railroad-merger-csx-shares-slide-2025-08-25/
[2] https://finance.yahoo.com/news/spite-warren-buffetts-177-billion-070600061.html