Another Victory for Warren Buffett – The Current Significance of Selling Apple and Holding Cash
Editor
There is a growing consensus that Warren Buffett has once again anticipated market trends. According to a Chosun Biz article, the strategy employed by Berkshire Hathaway since 2024 of selling Apple shares and increasing cash reserves is now being analyzed as a brilliant decision as of the end of 2025. Personally, I find this long-term investment strategy truly impressive.
The most intriguing part of the article was that Buffett did not sell Apple shares merely because their price was high, but because he was looking at a much bigger picture. The sale of Apple shares, which began in earnest in the second quarter of 2024, was unexpected for many investors at the time. After all, Apple was Berkshire’s largest holding, and Buffett had once said it was a stock he wanted to hold “forever.”
However, looking at the situation as of December 2025, we can see how accurate Buffett’s judgment was. Apple’s stock has undergone significant correction from its peak in July 2024, especially as concerns over its sluggish performance in the Chinese market and delays in AI transition have materialized, increasing investor worries. Meanwhile, Berkshire’s cash reserves are estimated to be around $320 billion, the highest in the company’s history.
There are various perspectives on this cash-holding strategy. Some investors might wonder, “What is the point of just holding cash?” In reality, considering inflation, the real value of cash declines. However, from Buffett’s perspective, cash is not just an asset but ‘ammunition’ to seize opportunities.
The Importance of Market Timing and Valuation
One particularly noteworthy aspect mentioned in the article is Buffett’s philosophy regarding valuation. Considering that the PER of Apple at the time of sale exceeded 30, it demonstrates that no matter how good a company is, if the price is too high, it can be sold. This is a point that many individual investors can easily overlook.
Looking at Apple’s situation in 2025, several challenges have become more apparent. The decline in market share in China is more severe than expected, and the counterattack from local Chinese brands like Huawei is intensifying. Additionally, the delay in introducing AI features has left Apple lagging behind competitors like Samsung and Google.
Particularly concerning is the delay in the launch of Apple Intelligence. The comprehensive AI features expected by the end of 2024 are still incomplete in 2025. In contrast, Samsung’s Galaxy AI and Google’s Gemini integrated features have already demonstrated a significant level of completion, raising doubts about Apple’s AI competitiveness.
In this context, Buffett’s decision to reduce Apple shares seems like an excellent judgment. Of course, Apple remains a great company, and its brand power and ecosystem competitiveness are still strong, but it is also true that its growth momentum is not as certain as before. Especially, the sluggishness in the massive Chinese market seems unlikely to be a temporary phenomenon.
Interestingly, Buffett did not only sell Apple shares. The article mentions that other major holdings were also partially sold. This can be interpreted as a cautious approach to the overall market situation rather than concerns about a specific company.
The Strategic Value of Cash and Future Prospects
There are multiple interpretations of why Buffett is holding cash. The first possibility is simply that he hasn’t found attractive investment targets. Given that the valuation of the U.S. stock market is historically high, there might not be many stocks worth buying from Buffett’s value investor perspective.
The second possibility is concerns about the economic situation. As of 2025, the U.S. economy remains robust, but considering inflationary pressures, interest rate conditions, and geopolitical risks, a correction could occur at any time. There are indeed many uncertainties, such as the Federal Reserve’s interest rate policy, trade relations with China, and the prolonged Ukraine war.
The third possibility is waiting for a bigger opportunity. With $320 billion in cash, it’s enough to acquire an entire large corporation. If a major market correction occurs, he could purchase excellent companies at a low price in bulk.
Personally, I think the third possibility is the most likely. Buffett employed a similar strategy during the 2008 financial crisis. He had secured cash in advance and, when the crisis hit, invested in strong companies like Goldman Sachs and General Electric under favorable conditions. We all know the results of that.
But can such a strategy be applied to individual investors? It seems challenging to do exactly the same. Individual investors may not have the luxury to hold cash for decades like Berkshire, and they are more directly affected by inflation. However, securing at least some cash seems to have definite value.
This is especially true in the current environment where market valuations are high. With the S&P 500’s PER exceeding 25, there’s no need to invest recklessly. While the market could continue to rise, it’s risky to invest all funds.
Another point to note is that Buffett seems to be gradually changing his perspective on tech stocks. Previously, he rarely bought tech stocks because he claimed not to understand technology well, but through his investment in Apple, he showed that tech stocks could also be targets for value investing. However, through this sale, he also demonstrated that tech stocks are not necessarily for long-term holding.
This provides important implications for the current market experiencing an AI boom. Stocks related to AI, like NVIDIA and Microsoft, have shown tremendous growth, but these stocks, too, will ultimately be evaluated based on fundamentals and valuation. Buffett’s philosophy that no matter how good the technology, if the price is too high, it can be sold, can also apply here.
Looking at the situation as of the end of 2025, Buffett’s strategy seems likely to shine even more. Economic uncertainty persists, and geopolitical risks continue. In such a situation, a strategy of securing sufficient cash and waiting for opportunities seems very wise. Although there may be opportunity costs in the short term, I believe it could lead to greater returns in the long term.
Ultimately, what we can learn from this case is that the most important things in investing are timing and patience. It’s not about buying a good company no matter what, but waiting until you can buy it at a reasonable price. And securing cash until that opportunity comes. Buffett has once again shown that these basic principles remain valid.
This article was written after reading the [Investment Note] Buffett Was Right Again – Chosun Biz article, adding personal opinions and analysis.
Disclaimer: This blog is not a news outlet, and the content is the author’s personal opinion. The responsibility for investment decisions lies with the investor, and no responsibility is taken for investment losses based on the content of this article.
