Warren Buffett’s Portfolio Changes: What Berkshire Hathaway’s Divestments Signal

Market observers often look to the actions of highly successful investors for clues about potential economic shifts. When figures renowned for their long-term perspective begin adjusting their portfolios, particularly by increasing cash reserves, it frequently signals a cautious outlook on the near-term future of the markets. Such strategic positioning often precedes periods of volatility or anticipated downturns.

Warren Buffett, the celebrated investor leading Berkshire Hathaway (BRK.A), exemplifies this approach. His strategy often involves investing for the long haul in companies perceived to offer intrinsic value. However, another key element of his methodology includes accumulating cash when market conditions appear uncertain or potentially overvalued. Notably, the cash holdings within Berkshire Hathaway have reached substantial levels recently.

Indicative of this potential shift in stance, several significant positions within Berkshire Hathaway’s portfolio were liquidated during the final quarter of 2024. These divestments provide insight into the current perspective held by the “Oracle of Omaha.”

Notable Divestments by Berkshire Hathaway

Analysis of regulatory filings reveals specific adjustments made late last year, suggesting a move towards a more defensive or opportunistic cash-heavy position.

Ulta Beauty (ULTA)

One position that was significantly reduced involved the beauty retailer Ulta Beauty. While investments don’t always yield spectacular results, Berkshire Hathaway sold nearly its entire stake in ULTA during the last three months of 2024. This decision appears prescient in retrospect, as Ulta Beauty’s stock experienced a decline of approximately 15% in the early part of 2025, following Buffett’s exit.

SPDR S&P 500 ETF (SPY)

A more telling move was the complete divestment from the SPDR S&P 500 ETF Trust. Berkshire Hathaway had initially acquired a position in this prominent exchange-traded fund, which tracks the S&P 500 index, back in late 2019. The entirety of this holding was sold off in the final quarter of 2024. Given that the SPY saw a drop of over 4.5% in the subsequent months of 2025, the timing of this sale seems advantageous, locking in gains accumulated over the holding period.

Vanguard S&P 500 ETF (VOO)

Similarly, Berkshire Hathaway completely exited its position in the Vanguard S&P 500 ETF, known as one of the largest ETFs globally. This investment mirrored the timeline of the SPY holding, having been initiated in 2019 and fully liquidated in late 2024. As with the SPY, this move preceded a downturn, with VOO experiencing a decline of nearly 5% in early 2025. Selling off stakes in broad market index ETFs like SPY and VOO is often interpreted as a particularly strong signal of caution regarding the overall market direction.

While Warren Buffett himself hasn’t explicitly stated expectations of an imminent market correction, these strategic exits from specific stocks and, more significantly, broad market ETFs during late 2024, coupled with Berkshire Hathaway’s high cash levels, strongly suggest a belief that market conditions may become less favorable, or that better buying opportunities might emerge following a potential pullback.