Warren Buffett has so many great, plain-language expressions about investing. My favorite is “when the tide goes out, you can see who’s swimming naked.” To me, that is a perfect analogy to what happens in every bear market, and to some extent, every stock market correction. A hedge fund blowup here, a short squeeze there, and before you know it, you’re talking about real money.
Buffett has stepped away from his role as CEO, passing on the reins at Berkshire Hathaway to Greg Abel.
Early in this new era, Berkshire Hathaway’s (BRK.A) (BRK.B) portfolio is becoming noticeably more concentrated in high-conviction, cash-rich market leaders.
Let’s take a look at the long-term moves just revealed in the company’s latest 13F filing for Q2 2026. Then, I’ll chart some of the stocks involved, using monthly price views instead of my default daily view, to try to see what the very long-term picture shows.
After quarters of sitting on cash, Berkshire turned into a net buyer, deploying over $23 billion in stock purchases while cleaning up smaller legacy positions.
The big adds included Alphabet (GOOG) (GOOGL). Berkshire aggressively expanded its stake, boosting Class A shares (GOOGL) by 45% and expanding its Class C position (GOOG) over sevenfold. Combined, Alphabet is now a top holding in the portfolio worth over $37 billion.
Other notable adds included Delta Air Lines (DAL). Berkshire added 17.5 million shares, a 44% increase, bringing its total stake to over 57 million shares. This reflects renewed confidence in travel demand and airline cash flow resilience. Berkshire also built up its position in Lennar (LEN) by roughly 30% while opening a fresh position in D.R. Horton (DHI). It also increased its position in Macy’s (M) by over 140%, treating the retail turnaround as a value play.
On the flip side of Mr. Abel’s ledger, the multi-quarter exit strategy in Bank of America (BAC) continued. Berkshire shed another 30.2 million shares (6%), pulling cash out of traditional banking. The firm also trimmed positions in Capital One (COF), Kroger (KR), and DaVita (DVA). This supports the effort to eliminate minor holdings and consolidate capital into core ideas.
What Does It All Mean?
Rotating out of bank stocks (BAC) and into Alphabet (GOOGL) signals a clear preference for pristine, debt-light balance sheets with massive search and cloud cash flows over credit-sensitive financials. Loading up on homebuilders and airlines shows Berkshire isn’t preparing for an immediate economic shutdown. Instead, it is placing selective bets on housing deficits and travel demand. And, in a move that happens to be in sync with my own portfolio strategy, the team is eliminating smaller “side bets” that reduce clutter, reinforcing that top-heavy conviction beats holding dozens of minor positions.
What Do the Long Term Charts Say?
GOOGL, using this monthly chart going back 15 years, looks terrible. The monthly percentage price oscillator (PPO) looks very similar to that of 2022, when the stock fell around 40%. That said, the whole market cratered back then. It reminds us that an outfit the size of Berkshire is right to focus on its core positions. The others just won’t move the needle much.
And as opposed to a trader who is price sensitive, or a technician like me who looks at this chart and gasps, the largest investors play a very different game. Still, this reminds me not to have GOOGL on my “best long-term buys” list. Not at this level, anyway.
While financial stocks have had a bid under them recently, they look pretty spent on a short-term basis (not shown). And while this monthly chart of BAC below is not inspiring to me, it does present very differently than GOOGL. It is still in an uptrend, with all three moving averages continuing to climb. If anything, that hints at a top in interest rates within the next 6-12 months.
Finally, the monthly view on DHI is easily the most intriguing to me. Again, thinking as a long-term investor, I see a shrinking range of volatility, in place since 2024. The PPO is still persistently heading south, however. My bottom line here is that while DHI is likely to end up being a very good buy for Berkshire in the long run, the path to $200 on the stock might run through $100 first.
In that respect, DHI is very representative of the stock market as I see it more broadly. Even the long-term buys will likely need to be dragged down with the rest.
That’s why Warren Buffett and Charlie Munger ran Berkshire as a business, not a hedge fund. The former can take that long-term view, the latter is in the business of meeting constant performance expectations.
So, who’s swimming naked? Any investor that thinks they are a trader, and any trader who thinks they are an investor. There’s a big difference. Seek to know yourself, and don’t try to be anyone else.
Rob Isbitts is a semi-retired CIO, former fiduciary investment advisor, and Barchart columnist. Check out his other work at ETFYourself.com (featuring the Fresh Charts weekly trading post), and ROAR.PiTrade.com, helping investors to better-manage their own portfolios.
