Warren Buffett’s Berkshire Hathaway has accumulated an unprecedented cash reserve of $381.7 billion as of Q3 2025, marking the largest war chest in the conglomerate’s history. This strategic positioning, coupled with strong operating performance and selective equity sales, signals a cautious yet opportunistic approach to capital deployment in an overvalued market environment. This analysis examines the underlying strategy, historical context, and implications for Singapore investors and businesses.
Part 1: Q3 2025 Earnings Breakdown – The Numbers Behind the Strategy
Financial Performance Highlights
Berkshire Hathaway’s Q3 2025 operating profit surged 34% year-over-year to $13.485 billion, driven primarily by a remarkable 200% increase in insurance underwriting income to $2.37 billion. This performance occurred during an unusually quiet disaster season, demonstrating the cyclical nature of insurance profitability.
Key Q3 2025 Metrics:
- Operating Earnings: $13.485 billion (up 34% YoY)
- Total Revenue: $94.97 billion (up 2.1% YoY)
- Cash Pile: $381.7 billion (record high)
- Equity Sales: $6.1 billion during the quarter
- Share Buybacks: Zero for fifth consecutive quarter
- Net Investment Income: $3.2 billion (down 13% due to lower interest rates)
The Insurance Powerhouse
Both Berkshire’s primary insurance and reinsurance businesses turned pretax underwriting profits after posting losses in the year-ago period. However, not all segments performed equally. Geico’s pretax underwriting profit fell 13% amid higher claims, even as the unit continued to add new clients, highlighting ongoing competitive pressures in the auto insurance market.
Economic Barometer Function
Berkshire’s earnings are closely watched because the conglomerate’s stable of businesses—ranging from insurance to rail, energy and manufacturing—provides a snapshot of the health of the US economy. The Q3 results paint a picture of moderate economic growth with selective strength in insurance offset by challenges in other sectors.
Part 2: The Cash Accumulation Strategy – Why $382 Billion?
Historical Context: A Familiar Pattern
Leading up to the dot-com crash in the early 2000s and the Great Recession, trends indicate that Berkshire was bolstering its cash position. This pattern has repeated throughout Buffett’s career, as he positions Berkshire to capitalize on market dislocations.
During past recessions, Buffett deployed capital aggressively:
- Dot-com recession (2001-2002): Acquired manufacturing businesses including Shaw Industries, Johns Manville, XTRA, and MiTek
- Great Recession (2008-2009): Invested $5 billion each in Goldman Sachs and Bank of America, plus stakes in General Electric
Following the inception of the dot-com recession in 2001, Berkshire’s cash balance began to decline as the company started to deploy its cash as the market sold off.
The “No Buyback” Signal
Buffett once again refrained from repurchasing shares despite a significant pullback in the stock. The company said there were no share buybacks during the first nine months of 2025. This is particularly telling given that Class A and B shares of the conglomerate are up 5% each in 2025, while the S&P 500 is up 16.3%.
The absence of buybacks suggests Buffett views even his own stock as overvalued at current prices—a sobering assessment for broader market valuations.
Market Valuation Concerns
One of Buffett’s favorite valuation indicators is currently at the highest level since 1947—the ratio between the market cap of the entire stock market and US GDP, commonly known as the Buffett indicator, now stands at well over 200%. This means the S&P 500 is valued at more than double the entire American economy.
Much of this extreme valuation comes from the frenzy around artificial intelligence, creating what Buffett sees as speculative excess rather than durable value creation.
Buffett’s Own Words on Cash Strategy
During Berkshire’s annual shareholders meeting, Buffett explained: “I don’t think anybody sitting at this table has any idea of how to use it effectively, and therefore we don’t use it,” emphasizing that “we only swing at pitches we like”.
He added: “As the world gets more sophisticated, complicated and intertwined, more can go wrong,” noting that the company aims to be prepared to “act when that happens”.
The Treasury Bill Strategy
Berkshire’s cash reserves are heavily invested in Treasury bills (T-bills), totaling $288 billion. With Treasury yields relatively high, this strategy lets Buffett earn a steady, risk-free return—a more attractive proposition than deploying capital into overvalued equities.
Part 3: Portfolio Repositioning – What Buffett is Selling (and Buying)
Major Equity Sales
Buffett has been an aggressive seller of US equities:
Apple Reduction: Berkshire sold $134 billion in equities in 2024, with the decision to shed most of Apple stock now looking especially well timed. The company has reduced its Apple position by approximately 50% from peak holdings.
Bank of America: Sold 41% of holdings worth over $1 billion
Complete Exits: T-Mobile (entire billion-dollar stake liquidated), Charter Communications (position halved)
Net Selling Pattern: This marks the 11th straight quarter that Buffett has been a net seller of stocks. The last time he was a net buyer was Q3 2022.
Strategic Acquisitions
Despite the selling spree, Buffett hasn’t been completely idle:
OxyChem Deal: Last month, Berkshire announced a deal to buy Occidental Petroleum’s petrochemical unit, OxyChem, for $9.7 billion in cash. The deal marks Berkshire’s largest since 2022, when it paid $11.6 billion for insurer Alleghany.
This acquisition signals Buffett’s willingness to deploy capital for the right opportunities—specifically in energy infrastructure with durable competitive advantages.
The Japanese Trading House Bet
Perhaps most revealing of Buffett’s strategic thinking is his continued investment in Japanese trading houses (sogo shosha):
Berkshire Hathaway raised its holdings in five Japanese trading houses—Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo—by more than 1 percentage point each, to stakes ranging from 8.5% to 9.8%.
At the end of 2024, the market value of Berkshire’s Japanese holdings came in at $23.5 billion, with the aggregate cost at $13.8 billion—representing a healthy profit margin.
Why Japan?
Buffett noted these companies “very successfully operate in a manner somewhat similar to Berkshire itself,” involved in sectors like energy, metals, machinery, chemicals, food, and textiles, from upstream to downstream resource projects.
Valuations for Japan’s trading companies continue to look attractive. Itochu fetches 12.1 times earnings and 1.8 times book value. Marubeni trades at 9.03 times earnings and 1.13 times book. Mitsubishi is at 10.3 times earnings and 1.16 times book, Mitsui at 8.6 times earnings and 1.1 times book, and Sumitomo is at 10.6 times earnings and 0.9 times book.
Compare these valuations to the S&P 500’s forward P/E of approximately 25x, and the value proposition becomes clear.
Currency Hedging Advantage: Part of the investment strategy involves Buffett hedging currency risk by selling Japanese debt and then pocketing the difference between dividends. Berkshire reported $2.3 billion in after-tax gains in its Japanese bonds, of which $850 million were from 2024 alone owing to the strength of the dollar, which appreciated around 11% against the yen.
Long-Term Commitment: Buffett stated: “I expect that Greg and his eventual successors will be holding this Japanese position for many decades and that Berkshire will find other ways to work productively with the five companies in the future”.
Part 4: Strategic Philosophy – Understanding Buffett’s Market Timing
“Be Greedy When Others Are Fearful”
Buffett’s famous principle states: “A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful”.
Currently, with markets near all-time highs and investor sentiment reflecting “casino-like behavior”, Buffett is clearly being fearful (or at least cautious) while others remain greedy.
The Cathedral vs. Casino Metaphor
Buffett once described the economy using a metaphor of a cathedral with a casino attached. The “cathedral” is where real business growth and value creation happen over decades. The “casino” is where people speculate on short-term price movements. His recent moves make it clear: he sees too much action in the casino and not enough value in the cathedral.
Historical Success of Patient Capital
In the aftermath of the Great Recession, Buffett was proven correct in his strategy. “Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later”.
The key insight: Buffett isn’t timing the market’s exact bottom. He’s simply waiting for prices that offer compelling risk-reward ratios.
What Might Trigger Deployment?
Based on historical patterns, Buffett typically deploys capital when:
- Market corrections create value: 20-50% drawdowns in quality companies
- Credit markets freeze: Opportunities to provide liquidity at attractive terms
- Sector-specific distress: Industries facing temporary challenges but with durable fundamentals
- Forced selling: When institutions must liquidate positions regardless of value
As Buffett stated at the 2025 annual meeting: “We’re not in a hurry. The best investments are made when others are in a panic”.
Part 5: Large Cash Positions – Why They Signal Caution AND Opportunity
The Dual Nature of Cash Reserves
Large cash positions in value investing serve two critical functions:
1. Risk Management (Defensive)
- Protection against market downturns
- Flexibility to weather economic uncertainty
- No forced selling during distress
- Preserves purchasing power for future opportunities
2. Opportunity Creation (Offensive)
- Capital available when others can’t access it
- Ability to move quickly on distressed assets
- Negotiating leverage in bilateral transactions
- Compound interest from safe short-term investments
The Inflation Trade-off
Buffett once warned in 2008: “Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value”.
However, context matters. In 2008, interest rates were near zero. In 2025, with Treasury bills yielding 4-5%, the opportunity cost of holding cash is significantly lower. Buffett can afford to be patient while earning reasonable returns.
Market Timing vs. Opportunity Spotting
Buffett has stated multiple times that he never made an investment decision based on an economic prediction. The first reason for his buildup of cash is because he doesn’t see any attractive investment opportunities in today’s stock market.
This isn’t market timing—it’s value discipline. When everything is expensive, cash becomes the best investment.
Sector Rotation Signals
Berkshire’s Q2 activity reveals a clear sector rotation strategy. The company has exited or trimmed positions in high-growth tech names, while adding to niche sectors with structural tailwinds in industrials, energy, consumer staples, and healthcare.
This suggests Buffett is positioning for a potential economic slowdown where defensive sectors with pricing power and inelastic demand will outperform.
Part 6: Singapore Impact Analysis – What This Means for the Lion City
Direct Berkshire Presence in Singapore
Berkshire Hathaway Specialty Insurance (BHSI) Asia is headquartered in Singapore with offices in Hong Kong, Kuala Lumpur, Tokyo, Seoul and Manila. The company underwrites commercial property, casualty, financial and executive lines, marine, healthcare and accident & health insurance.
BHSI’s Singapore arm, established in 2014, has become a significant player in Asia’s specialty market, known for its disciplined underwriting and capacity to write high-limit, complex risks. Its financial strength, backed by Berkshire’s AA+ credit rating, has given it an advantage with regional brokers seeking secure long-term partners.
Impact on Singapore Insurance Market
Capacity and Pricing: The record cash position strengthens BHSI’s ability to underwrite large, complex risks in Singapore and Southeast Asia. However, if margins at GEICO and the reinsurance division tighten, Berkshire may adopt a more selective underwriting stance, influencing risk pricing and available capacity across the Asia-Pacific region.
Competitive Positioning: BHSI continues to expand cautiously, leveraging its global balance sheet to offer stable capacity at a time of increased weather and geopolitical volatility. For Singapore businesses requiring specialty insurance, BHSI remains a reliable counterparty backed by unprecedented financial strength.
Regional Commitment: Berkshire’s commitment to the region appears firm. Its conservative reserving and long-term approach have made it a trusted counterparty in markets such as Singapore, Hong Kong and Japan.
Investment Implications for Singapore Investors
1. Valuation Warning Signal
Singaporean investors should heed Buffett’s caution. The Straits Times Index (STI), while not as elevated as US markets, has been influenced by global liquidity conditions. Key takeaways:
- Heightened selectivity required: Not all equities offer compelling value
- Focus on quality: Companies with strong balance sheets, pricing power, and sustainable competitive advantages
- Dividend sustainability: In a higher-rate environment, focus on companies with genuine cash generation, not financial engineering
2. Currency Considerations
The Singapore dollar has been relatively stable against a basket of currencies. However, Buffett’s yen-hedging strategy through Japanese bond issuance offers lessons:
- Natural hedges: Singapore investors with US exposure should consider hedging strategies
- Regional diversification: The Japanese trading house playbook suggests opportunities in undervalued Asian conglomerates
- Carry trade opportunities: Singapore’s status as a financial hub provides access to diverse currency-hedged investment structures
3. Real Estate and REITs
Singapore’s property market faces headwinds from elevated interest rates and government cooling measures. Buffett’s cash positioning suggests:
- Patience rewarded: Wait for distressed opportunities rather than chasing yield
- Office sector vulnerability: Work-from-home trends create structural challenges
- Industrial/logistics resilience: E-commerce growth supports warehouse demand
4. Banking Sector Implications
Singapore’s three major banks (DBS, OCBC, UOB) have benefited from higher interest rates. However, Buffett’s reduction in Bank of America signals caution:
- Net interest margin compression ahead: As rates stabilize or decline, profitability pressures emerge
- Credit quality concerns: Economic slowdown could impact loan books
- Relative value: Singapore banks trade at more reasonable valuations than US peers (P/B ratios of 1.1-1.5x vs US banks at 1.5-2.0x)
Opportunities for Singapore Businesses
1. M&A Environment
Berkshire’s record cash pile and willingness to make large acquisitions (like the $9.7B OxyChem deal) creates opportunities:
- Strategic sales: Well-run Singapore businesses with strong fundamentals could attract Berkshire interest
- Succession planning: Family businesses seeking long-term, stable ownership
- Infrastructure assets: Singapore’s logistics, energy, and water infrastructure align with Berkshire’s interests
2. Insurance and Reinsurance
Singapore’s position as a regional insurance hub benefits from Berkshire’s presence:
- Reinsurance capacity: Singapore-based insurers can access Berkshire’s balance sheet for large risks
- Talent development: BHSI’s operations create employment and training opportunities
- Risk management expertise: Transfer of Berkshire’s underwriting discipline to the region
3. Japanese Trading House Model
The Japanese sogo shosha structure offers lessons for Singapore conglomerates:
- Keppel Corporation: Already operates across energy, urban development, and connectivity—similar diversification model
- Sembcorp Industries: Energy and urban solutions portfolio aligns with trading house approach
- YTL Power/Venture Corporation: Regional conglomerates with diversified industrial exposure
Singapore companies that demonstrate:
- Disciplined capital allocation
- Shareholder-friendly policies
- Reasonable valuations (P/E below 15x, P/B below 1.5x)
- Strong dividend growth
…could attract Buffett-style long-term investors.
Regional Economic Implications
Southeast Asian Growth
Singapore’s economy is intertwined with regional growth. Buffett’s defensive positioning suggests:
- China slowdown risks: Singapore’s trade-dependent economy faces headwinds
- ASEAN opportunity: Diversification away from China could benefit Vietnam, Indonesia, Malaysia
- Infrastructure spending: Governments may increase fiscal stimulus, supporting construction and engineering firms
Monetary Policy Divergence
The Monetary Authority of Singapore (MAS) uses the exchange rate as its primary policy tool. Buffett’s strategy suggests:
- Rate-cut cycle approaching: US Fed rate cuts could pressure MAS to ease SGD appreciation
- Regional currency volatility: Capital flows may shift, creating forex opportunities and risks
- Bond market implications: Singapore government bonds may see increased demand as safe-haven assets
Sector-Specific Singapore Impact
Technology Sector
Buffett’s reduction of Apple and tech exposure warns Singapore tech investors:
- Sea Limited (SE): High-growth, high-valuation model faces scrutiny
- Grab Holdings: Path to profitability critical in risk-off environment
- Semiconductor exposure: Singapore’s wafer fab and equipment companies vulnerable to cycle
Commodities and Trading
Singapore’s role as a trading hub for oil, LNG, and agricultural commodities:
- Trafigura, Vitol, Glencore presence: Singapore-based trading operations benefit from volatility
- Shipping and logistics: Potential beneficiaries if global supply chains remain disrupted
- Energy transition: Buffett’s OxyChem purchase shows interest in energy infrastructure
Financial Services
Beyond banking, Singapore’s wealth management and insurance sectors:
- Private banking: High-net-worth individuals seeking capital preservation (cash-like strategies gain favor)
- Insurance brokers: Increased demand for sophisticated risk management
- Asset management: Shift from growth to value investing strategies
Part 7: Lessons for Singapore Investors – Actionable Strategies
1. Build Your Own Cash Buffer
Personal Finance Implications:
- Emergency fund: 6-12 months of expenses in cash/short-term instruments
- Opportunity fund: 10-20% of investment portfolio in cash for tactical deployment
- Singapore Savings Bonds: Risk-free, liquid option earning comparable yields to short-term bonds
2. Quality Over Momentum
Shift focus from high-flying growth stocks to quality companies with:
- Consistent profitability: 10+ years of positive earnings
- Strong balance sheets: Net cash or low debt-to-equity (<0.5x)
- Competitive moats: Pricing power, network effects, brand strength
- Shareholder returns: Growing dividends and sensible buybacks
Singapore Examples:
- DBS Group (dominant position, strong ROE)
- Singapore Technologies Engineering (defense and aerospace moat)
- Jardine Matheson (diversified conglomerate, reasonable valuation)
3. Geographic Diversification
Follow Buffett’s lead into undervalued Asian markets:
- Japan: Trading houses, financials, industrials trading below book value
- South Korea: Technology and industrial giants at discount valuations
- Taiwan: Semiconductor supply chain beyond just TSMC
- Select ASEAN: Infrastructure plays in Vietnam, Indonesia
4. Value Investing Discipline
Buffett’s Checklist Applied to Singapore Context:
✓ Understandable business: Can you explain what they do in simple terms? ✓ Durable competitive advantage: Will they dominate in 10 years? ✓ Capable and trustworthy management: Track record of capital allocation? ✓ Attractive valuation: P/E below market average, P/B below 1.5x, dividend yield above risk-free rate? ✓ Margin of safety: Buying at 30-50% discount to intrinsic value?
5. Avoid FOMO and Speculation
With crypto, meme stocks, and AI hype dominating headlines:
DON’T:
- Chase momentum without understanding fundamentals
- Use leverage to amplify returns
- Invest in businesses you don’t understand
- Follow social media “gurus” blindly
DO:
- Focus on long-term wealth building
- Accept that missing rallies is okay if valuations don’t make sense
- Remember that protecting capital is as important as growing it
- Learn continuously about businesses and industries
6. Insurance and Protection
Given Berkshire’s insurance strength:
- Adequate coverage: Health, life, property, liability
- Disability insurance: Critical for income protection in Singapore’s high-cost environment
- Long-term care: Singapore’s aging population makes this increasingly important
7. Think in Decades, Not Days
Buffett wrote in 2008: “In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497”.
Singapore has similarly overcome:
- 1997 Asian Financial Crisis
- 2000 Dot-com Bubble
- 2003 SARS Epidemic
- 2008 Global Financial Crisis
- 2020 COVID-19 Pandemic
The STI has grown from ~1,000 in 1987 to ~3,400 today (3.4x return), plus dividends. Long-term investors who stayed the course were rewarded.
Part 8: Risk Scenarios and Contingency Planning
Scenario 1: Market Correction (20-30% Decline)
Probability: Moderate to High (next 12-24 months)
Singapore Impact:
- STI could decline to 2,500-2,800 range
- Real estate prices could soften 10-15%
- Unemployment may rise to 3-4%
Buffett-Inspired Response:
- Have cash ready to deploy (Singapore Savings Bonds mature quickly)
- Focus on quality companies at distressed valuations
- Look for forced selling by overleveraged investors
- Consider REITs with strong sponsors and essential assets
Scenario 2: Stagflation (Low Growth + Elevated Inflation)
Probability: Low to Moderate
Singapore Impact:
- MAS forced to maintain strong SGD despite growth slowdown
- Imported inflation from food and energy
- Margin compression for businesses unable to pass costs
Buffett-Inspired Response:
- Companies with pricing power become critical (utilities, FMCG)
- Real assets with inflation protection (property, commodities)
- Avoid long-duration bonds
- Focus on businesses with low capital intensity
Scenario 3: Geopolitical Crisis (Taiwan Conflict, Trade War Escalation)
Probability: Low but High Impact
Singapore Impact:
- Supply chain disruptions
- Financial market volatility
- Trade volume declines
- Potential sanctions/counter-sanctions affecting regional trade
Buffett-Inspired Response:
- Maintain elevated cash levels
- Avoid concentrated geopolitical risks
- Favor domestically-focused businesses
- Consider gold/safe-haven assets (5-10% portfolio)
Scenario 4: Goldilocks Soft Landing
Probability: Low (Market Already Priced for Perfection)
Singapore Impact:
- Continued economic growth
- Gradual rate normalization
- Stable property market
- Corporate earnings growth
Buffett-Inspired Response:
- Maintain discipline despite temptation to chase returns
- Still focus on quality and valuation
- Recognize that good outcomes don’t justify any price
- Prepare for eventual cycle turn
Part 9: The Succession Question – Greg Abel and the Post-Buffett Era
Leadership Transition
Greg Abel’s impending promotion coincides with a share price tumble double digits from all-time highs, as he prepares to succeed Warren Buffett, remaining chairman, in January.
Continuity of Strategy
Regarding the Japanese trading houses, Buffett stated: “I expect that Greg and his eventual successors will be holding this Japanese position for many decades”.
This suggests:
- Long-term investment horizon maintained: Abel likely to continue value-oriented, patient approach
- Decentralized management: Berkshire’s subsidiaries will continue operating independently
- Discipline preserved: No evidence Abel will deviate from Buffett’s conservative financial principles
Singapore Implications
For BHSI Asia:
- Leadership continuity in Singapore operations
- Continued conservative underwriting approach
- No anticipated major strategic shifts
For Regional Investors:
- Abel’s track record in energy and utilities (BHE) suggests continued interest in infrastructure
- Asia-Pacific focus likely to continue given demographic and growth trends
- Singapore’s strategic position as financial hub remains attractive
Conclusion: Key Takeaways for Singapore Investors
The Strategic Message
Buffett’s record $382 billion cash position is neither market timing nor pessimism—it’s value discipline. When quality investments are scarce at reasonable prices, cash becomes the best position.
Core Principles Applied to Singapore Context
- Valuation Matters: Don’t overpay, even for great businesses
- Quality Over Growth: Durable franchises beat exciting stories
- Patience is Power: The ability to wait for opportunities is a competitive advantage
- Geographic Flexibility: Look beyond home market for value (Japan, Korea, select ASEAN)
- Insurance as Engine: Protection + cash generation = optionality
- Long-term Orientation: Think decades, not quarters
Singapore-Specific Action Items
Immediate (0-3 months):
- Assess portfolio valuation—are you overpaying?
- Build cash buffer to 15-20% of investment portfolio
- Review insurance coverage for adequacy
- Identify 3-5 quality Singapore/Asian companies to watch for entry points
Medium-term (3-12 months):
- Research Japanese trading houses (ADRs available to Singapore investors)
- Evaluate Singapore REITs for distressed opportunities
- Consider global diversification beyond STI
- Develop watchlist of quality businesses at target valuations
Long-term (1-3 years):
- Implement systematic value investing approach
- Build position in defensive sectors with pricing power
- Maintain discipline through market cycles
- Educate yourself continuously on businesses and industries
Final Thought
Warren Buffett at 94 years old, managing $382 billion in cash, demonstrates that sometimes the hardest thing in investing is doing nothing. For Singapore investors navigating expensive markets, geopolitical uncertainty, and economic transition, this patience may be the most valuable lesson of all.
The cathedral of value creation continues to stand. The casino of speculation remains tempting. Choose wisely.
Analysis based on Berkshire Hathaway Q3 2025 earnings released November 1, 2025, and historical financial data. Singapore market implications derived from regional economic trends and Berkshire’s documented Asia-Pacific operations. This analysis is for educational purposes only and does not constitute investment advice.
Imagine turning £20,000 into £2.8 billion. That’s the magic Berkshire Hathaway has worked for its loyal shareholders since 1965, far outpacing the S&P 500 and leaving index funds in the dust. Even today, a simple £20,000 investment at the start of 2025 has already grown to around £22,400 — just by trusting in the power of smart choices.
Warren Buffett’s careful eye has kept the company strong, even as markets waver. While others chase trends, he builds strength for tomorrow, quietly holding more than $340 billion in cash, ready to seize the next great chance.
Yes, uncertainty lingers. Tariffs and high prices cast long shadows. Yet, Buffett’s focus on solid ground means Berkshire stands steady when others stumble.
As Warren prepares to pass the torch to Greg Abel later this year, the future feels both exciting and secure. With more than half the portfolio in giants like Apple and American Express, the company bets on what endures.
This isn’t just investing. It’s building a legacy — one that grows with patience, vision, and trust. If you dream of more than average returns, Berkshire Hathaway’s story could be your own. Why settle for less?
Historical Performance:
- Berkshire Hathaway has delivered a 19.9% annualized return since 1965, compared to the S&P 500’s 10.4%
- £20,000 invested 60 years ago would now be worth £2.8 billion, versus £9.9 million in an index fund
2025 Performance So Far:
- Berkshire Hathaway shares have gained about 12% year-to-date (as of early September 2025)
- This means £20,000 invested at the start of 2025 is now worth roughly £22,400
- This slightly outperformed the S&P 500’s 11% return over the same period
Current Situation:
- Buffett remains concerned about high US stock valuations and has been a net seller this year
- The company holds over $340 billion in cash, positioning it well for future opportunities
- Tariff-related uncertainty has created some downward pressure on the stock
Looking Ahead:
- Buffett plans to retire later in 2025, with Greg Abel set to take over leadership
- The investment portfolio is highly concentrated, with over 50% allocated to Apple, American Express, and Bank of America
- Despite succession risks and concentration concerns, the author believes Berkshire Hathaway shares remain worth considering for 2025
The article suggests that while challenges exist, Berkshire’s strong cash position and experienced management team could continue to deliver value for investors even after Buffett’s retirement.
Analysis of Berkshire Hathaway’s Leadership Transition and Singapore Investment Implications
Leadership Succession: A Historic Transition
Based on the search results, the situation is now confirmed: Warren Buffett announced his retirement decision on May 3, 2025, during Berkshire Hathaway’s annual shareholder meeting, with plans to step down as CEO by year-end MediumThe Washington Post. However, Buffett will remain as chairman while Greg Abel becomes CEO Warren Buffett is not retiring for good as Berkshire board votes to keep him as chairman, providing continuity during the transition.
Greg Abel’s Credentials:
- Currently 62 years old and Berkshire’s vice chairman of non-insurance operations Who is Berkshire Hathaway’s Greg Abel? Warren Buffett explained his choice of successor: ‘He understands businesses extremely well’
- Has worked with Buffett for more than two decades with a strong track record as a business operator Greg Abel is the successor to Warren Buffett at Berkshire Hathaway. Here’s how he got there
- Officially designated as successor since 2021 Who is Berkshire Hathaway’s Greg Abel? Warren Buffett explained his choice of successor: ‘He understands businesses extremely well’
Succession Risks Analysis:
- Operational Continuity: Abel’s 20+ year tenure suggests deep institutional knowledge
- Investment Philosophy: The bigger question is whether Abel will maintain Buffett’s disciplined, value-oriented approach
- Market Confidence: Berkshire shares reached record highs with a market value exceeding $1.1 trillion Warren Buffett is not retiring for good as Berkshire board votes to keep him as chairman following the announcement, suggesting market approval
Portfolio Concentration: A Double-Edged Sword
The concentration in Apple, American Express, and Bank of America (50%+ of portfolio) presents both opportunities and risks:
Risks:
- Single Point of Failure: Any significant downturn in these companies could severely impact returns
- Sector Exposure: Heavy weighting in financials (AXP, BAC) and technology (AAPL) creates sector-specific vulnerabilities
- Regulatory Risk: Banking regulations and tech antitrust actions could disproportionately affect the portfolio
Opportunities:
- Quality Companies: These are blue-chip companies with strong competitive moats
- Dividend Income: AXP and BAC provide steady dividend income
- Strategic Influence: Large stakes provide significant influence over these companies’ strategic directions
Singapore Investment Perspective: Strategic Advantages
For Singapore-based investors, Berkshire Hathaway offers unique advantages:
Tax Efficiency Benefits
- Capital Gains Tax Advantage: Singapore-based investors face no capital gains tax on US stock investments IRASMedium, making Berkshire’s appreciation-focused strategy highly tax-efficient for local investors.
- Dividend Withholding Tax Considerations:
- US investments are subject to 30% dividend withholding tax U.S. Dividend Withholding Tax: What Singapore investors must know | Dr Wealth
- Berkshire’s minimal dividend policy (historically pays no regular dividends) eliminates this tax drag
- The lack of dividends is advantageous for tax efficiency, as it allows for tax-deferred growth Why You Should Consider Investing in Berkshire Hathaway – The Physician Philosopher
Currency and Market Access
USD Exposure Benefits:
- Currency Diversification: Provides SGD investors with USD exposure, hedging against potential SGD weakness
- Inflation Hedge: USD assets can provide protection against domestic inflation
- Global Purchasing Power: Access to US market returns and global diversification through Berkshire’s international holdings
Singapore-Specific Investment Considerations
Regulatory Environment:
- Singapore’s favorable tax treatment of capital gains Singapore – Corporate – Income determination aligns perfectly with Berkshire’s capital appreciation strategy
- No restrictions on foreign investment for individual investors
- Strong regulatory framework provides investor protection
Market Access:
- Can be purchased through local brokerages with access to US markets
- Available through robo-advisors and wealth management platforms
- SGX-listed alternatives may exist but would still face the same underlying exposures
Strategic Recommendations for Singapore Investors
Position Sizing Considerations
Given the concentration risks, Singapore investors should consider:
- Portfolio Allocation: Limit Berkshire to 5-15% of total portfolio to manage concentration risk
- Diversification: Complement with Singapore REITs, SGX stocks, and other regional assets
- Currency Hedging: Consider partial currency hedging if SGD strengthening is a concern
Timing Considerations
The current environment presents mixed signals:
Positive Factors:
- Cash Position: Over $340 billion in cash provides opportunity for acquisitions during market downturns
- Succession Clarity: Market has responded positively to clear succession planning
- Proven Strategy: Long-term track record remains compelling
Risk Factors:
- Valuation Concerns: Buffett’s own comments about high US stock valuations suggest caution
- Transition Uncertainty: New leadership may bring strategy changes
- Geopolitical Risks: US-China trade tensions could impact multinational holdings
Long-term Outlook for Singapore Investors
Positive Scenarios:
- Successful Transition: Abel maintains Buffett’s discipline while adding operational expertise
- Market Correction: Large cash position enables opportunistic acquisitions
- Global Growth: Singapore’s growing wealth provides increasing investment capital for such opportunities
Risk Scenarios:
- Strategy Drift: New leadership moves away from proven value investing principles
- Concentration Blow-up: Major problems at Apple, AXP, or BAC severely impact returns
- Regulatory Changes: Changes to US tax treatment of foreign investments or Singapore’s capital gains policies
Conclusion
For Singapore investors, Berkshire Hathaway remains attractive due to the favorable tax environment and currency diversification benefits. However, the concentration risks and leadership transition warrant careful consideration. The investment makes most sense as part of a diversified portfolio, where Singapore investors can take advantage of the unique tax benefits while managing the inherent risks through proper asset allocation.
The key for Singapore investors is to view Berkshire not just as a stock pick, but as a strategic allocation that provides USD exposure, access to high-quality US businesses, and tax-efficient growth potential within the context of a broader, geographically diversified investment portfolio.
Berkshire Hathaway Investment Scenarios for Singapore Investors
Scenario Planning Framework
Base Case Assumptions
- Portfolio Allocation: 10% Berkshire Hathaway in diversified Singapore portfolio
- Time Horizon: 10-year investment period (2025-2035)
- Initial Investment: S$100,000 total portfolio (S$10,000 in Berkshire)
- USD/SGD Rate: Current ~1.35 baseline
SCENARIO 1: SUCCESSION SUCCESS
Probability: 60%
Scenario Description
Greg Abel successfully transitions into CEO role, maintains Buffett’s investment discipline while adding operational improvements. Market confidence remains high, and Berkshire continues delivering market-beating returns.
Key Drivers
- Leadership: Smooth transition, Abel proves capable successor
- Strategy: Maintains value investing approach with selective tech integration
- Market Environment: Moderate growth, occasional corrections provide buying opportunities
- Cash Deployment: $340B cash deployed effectively over 3-5 years
Financial Projections (10-year)
| Financial Projections (10-year) | |
| Metric | Outcome |
| Berkshire Annual Return | 12-15% |
| S&P 500 Benchmark | 8-10% |
| SGD Portfolio Value | S$259,000 – S$305,000 |
| Berkshire Contribution | S$31,000 – S$40,000 |
| USD/SGD Impact | #ERROR! |
Singapore Investor Benefits
- Tax Efficiency: Zero capital gains tax maximizes compound returns
- Currency Hedging: USD strength provides 10-20% currency gain
- Diversification: Access to quality US businesses unavailable on SGX
Risk Mitigation Success
- Portfolio diversification limits concentration risk to manageable levels
- Strong cash position provides downside protection during market volatility
- Proven investment philosophy continues under new leadership
SCENARIO 2: CONCENTRATION CATASTROPHE
Probability: 15%
Scenario Description
Major problems hit Apple, American Express, or Bank of America simultaneously. Regulatory crackdown on big tech, banking crisis, or competitive disruption causes severe portfolio damage.
Key Triggers
- Apple: Regulatory breakup or competitive displacement in key markets
- American Express: Digital payments revolution eliminates competitive moats
- Bank of America: Banking crisis or massive loan defaults
- Systemic Risk: Multiple positions affected by same macro trend
Financial Projections (10-year)
| Financial Projections (10-year) | |
| Metric | Outcome |
| Berkshire Annual Return | -2% to +5% |
| S&P 500 Benchmark | 6-8% |
| SGD Portfolio Value | S$215,000 – S$240,000 |
| Berkshire Contribution | S$8,000 – S$13,000 |
| USD/SGD Impact | -10% to +5% (mixed) |
Impact on Singapore Investors
- Underperformance: 10% allocation limits damage to 2-3% of total portfolio
- Opportunity Cost: Missed returns versus diversified alternatives
- Learning Experience: Validates importance of diversification principles
Portfolio Protection Mechanisms
- Limited Allocation: 10% position prevents catastrophic portfolio damage
- Rebalancing: Systematic rebalancing captures recovery opportunities
- Regional Diversification: SGX stocks, REITs provide offsetting stability
SCENARIO 3: STRATEGY DRIFT
Probability: 20%
Scenario Description
New leadership gradually abandons Buffett’s proven approach. Increased trading activity, growth stock focus, or aggressive acquisition strategy reduces returns and increases volatility.
Key Changes
- Investment Style: Shift from value to growth/momentum strategies
- Portfolio Turnover: Increased buying/selling activity
- Acquisition Strategy: Overpaying for trendy businesses
- Risk Management: Reduced margin of safety in investments
Financial Projections (10-year)
| Financial Projections (10-year) | |
| Metric | Outcome |
| Berkshire Annual Return | -2% to +5% |
| S&P 500 Benchmark | 6-8% |
| SGD Portfolio Value | S$215,000 – S$240,000 |
| Berkshire Contribution | S$8,000 – S$13,000 |
| USD/SGD Impact | -10% to +5% (mixed) |
Singapore Investor Implications
- Mediocre Performance: Returns in line with or below market averages
- Higher Volatility: Increased portfolio fluctuations
- Lost Differentiation: No longer provides unique value proposition
Strategic Response Options
- Reduce Allocation: Scale back Berkshire position to 5%
- Alternative Selection: Shift to Singapore value stocks or Asian funds
- Monitoring Approach: Wait for strategy correction before major changes
SCENARIO 4: PERFECT STORM RECOVERY
Probability: 5%
Scenario Description
Major market crash (2008-style) occurs during first 3 years, followed by strong recovery. Berkshire’s cash position enables massive opportunistic investments at depressed prices.
Market Dynamics
- Years 1-3: -40% to -50% market decline
- Years 4-10: Strong recovery with Berkshire outperforming significantly
- Currency: USD initially weakens, then strengthens substantially
- Interest Rates: Sharp cuts followed by gradual normalization
Financial Projections (10-year)
MetricOutcomeBerkshire Annual Return18-25%S&P 500 Benchmark10-12%SGD Portfolio ValueS$320,000 - S$450,000Berkshire ContributionS$46,000 - S$85,000USD/SGD Impact+20% to +35%
Singapore Investor Advantages
- Tax-Free Gains: Singapore’s capital gains exemption maximizes recovery benefits
- Currency Gains: Massive USD strength provides additional returns
- Patience Rewarded: Long-term holding strategy captures full recovery
PORTFOLIO ALLOCATION STRATEGIES BY SCENARIO
Conservative Approach (Risk-Averse Singapore Investors)
- Berkshire Allocation: 5-7%
- SGX Component: 40-50%
- Regional Diversification: 30-40%
- Bonds/REITs: 15-25%
Rationale: Minimizes concentration risk while maintaining USD exposure
Balanced Approach (Moderate Risk Tolerance)
- Berkshire Allocation: 8-12%
- SGX Component: 30-40%
- Regional Diversification: 35-45%
- Bonds/REITs: 10-20%
Rationale: Captures Berkshire benefits while maintaining diversification
Aggressive Approach (High Risk Tolerance)
- Berkshire Allocation: 15-20%
- SGX Component: 25-35%
- Regional Diversification: 40-50%
- Bonds/REITs: 5-15%
Rationale: Maximum exposure to potential outperformance
DYNAMIC REBALANCING STRATEGIES
Scenario-Based Triggers
| Scenario-Based Triggers | ||
| Market Condition | Action | Berkshire Allocation |
| Major Market Decline (-30%+) | Increase allocation | 12-15% |
| Strong Outperformance (+20% vs market) | Reduce allocation | 7-10% |
| Leadership Change Concerns | Maintain/Reduce | 5-8% |
| Cash Deployment Success | Increase allocation | 10-15% |
Annual Review Checklist
- Performance vs. Benchmark: Adjust allocation based on relative performance
- Strategy Consistency: Monitor for drift from value investing principles
- Currency Impact: Assess USD/SGD effects on total returns
- Portfolio Balance: Ensure overall diversification remains intact
SINGAPORE-SPECIFIC CONSIDERATIONS
Tax Optimization
- Capital Gains: Maximize benefit of Singapore’s zero capital gains tax
- Dividend Policy: Berkshire’s minimal dividends avoid US withholding tax
- Currency Timing: Consider SGD/USD conversion timing for maximum efficiency
Regional Integration
- Correlation Analysis: Monitor correlation with SGX stocks
- Sector Balance: Ensure Berkshire’s sector exposure complements local holdings
- Economic Cycle: Consider Singapore’s economic cycle relationship with US markets
Regulatory Environment
- Investment Limits: No restrictions on individual foreign investment
- Reporting Requirements: Understand disclosure obligations for large holdings
- Estate Planning: Consider implications for cross-border wealth transfer
KEY SUCCESS FACTORS
For Positive Outcomes
- Disciplined Allocation: Maintain target allocation regardless of short-term performance
- Regular Rebalancing: Systematic approach prevents concentration drift
- Long-term Perspective: 10+ year horizon captures full investment cycle
- Scenario Monitoring: Regular assessment of changing conditions
Risk Management
- Diversification Discipline: Never exceed 20% allocation regardless of performance
- Stress Testing: Regular portfolio stress tests under adverse scenarios
- Exit Strategy: Clear criteria for reducing or eliminating position
- Opportunity Cost Assessment: Regular comparison with alternative investments
CONCLUSION
The scenario analysis reveals that Berkshire Hathaway can play a valuable role in Singapore portfolios across most reasonable outcomes. The key insight is that the investment’s success depends more on proper portfolio integration and risk management than on predicting specific scenarios.
Optimal Strategy: Maintain 8-12% allocation with systematic rebalancing, treating Berkshire as a strategic USD/quality equity allocation rather than a standalone investment bet.
The Prudent Path: A Singapore Investor’s Journey with Berkshire Hathaway
Chapter 1: The Decision
Mei Lin sat in her Tanjong Pagar office, the Singapore skyline stretching before her as she reviewed her investment portfolio on a humid September evening in 2025. At 35, she had built a respectable nest egg of S$500,000 through disciplined saving and conservative investing in Singapore REITs and blue-chip SGX stocks. But lately, she’d been thinking about Warren Buffett’s impending retirement and what it might mean for investors like her.
“The Oracle of Omaha is finally stepping down,” she murmured, reading the headlines on her Bloomberg terminal. The news had been circulating for months, but now it was official. Greg Abel would take over as CEO of Berkshire Hathaway by year’s end.
Her colleague David, a seasoned wealth manager, knocked on her office door. “Still thinking about that Berkshire position?”
“I can’t shake the feeling that this is either a golden opportunity or a massive trap,” Mei Lin replied. “Buffett’s track record is legendary, but what happens when he’s gone?”
David settled into the chair across from her desk. “You know what I always tell my clients? Don’t bet everything on one outcome. But also don’t let paralysis keep you from good opportunities.”
Chapter 2: The Research
Over the next two weeks, Mei Lin dove deep into her analysis. She modeled different scenarios, each one telling a different story about Berkshire’s future.
The Success Story: Greg Abel seamlessly takes over, maintains Buffett’s discipline, and the company’s massive cash pile gets deployed brilliantly during the next market correction. Her S$50,000 Berkshire position (10% of her portfolio) grows to S$200,000 over the next decade.
The Disaster Scenario: Apple faces antitrust breakup, Bank of America gets caught in a banking crisis, and American Express loses ground to digital payments. Berkshire stumbles badly. But even then, her losses would be limited to S$25,000 – painful but not portfolio-destroying.
The Mediocrity Path: New leadership abandons the proven strategy, and Berkshire becomes just another large-cap stock, delivering market-average returns. Not exciting, but her US dollar exposure still provides currency diversification.
“The beautiful thing about being a Singapore investor,” she realized, “is that I don’t pay capital gains tax. Every dollar of appreciation I keep.”
Chapter 3: The Implementation
In October 2025, Mei Lin made her move. She invested S$50,000 in Berkshire Hathaway Class B shares, exactly 10% of her portfolio. But she didn’t stop there – she created a systematic rebalancing plan.
“Every quarter, I’ll review the allocation,” she wrote in her investment journal. “If Berkshire grows beyond 12% of my portfolio, I’ll trim. If it falls below 8%, I’ll add more. This isn’t about timing the market – it’s about maintaining balance.”
She also diversified the rest of her portfolio: 35% in SGX stocks, 25% in regional Asian equities, 20% in Singapore REITs, and 10% in bonds. Berkshire would be her window into high-quality American businesses and her hedge against Singapore dollar weakness.
Chapter 4: The Test
By March 2026, the markets had been kind. Berkshire was up 18% while the broader market gained 12%. Greg Abel had proven himself capable, making smart acquisitions with the company’s cash hoard and maintaining Buffett’s investment philosophy. Mei Lin’s Berkshire position had grown to S$59,000, pushing it above her 12% threshold.
“Time to rebalance,” she told herself, even though every instinct screamed to let winners run. She sold S$9,000 worth of Berkshire shares and reinvested the proceeds in underperforming SGX stocks.
Her friend Jason, who had put 30% of his portfolio into Berkshire, mocked her decision. “You’re selling your best performer! That’s crazy!”
“I’m not selling my best performer,” Mei Lin replied calmly. “I’m maintaining my strategy.”
Chapter 5: The Crisis
In September 2027, the crisis hit. A combination of rising interest rates, geopolitical tensions, and a tech sector correction sent markets tumbling. Apple, Berkshire’s largest holding, fell 35% amid antitrust concerns. The broader market dropped 25%, but Berkshire fell 30%.
Jason panicked and sold his entire position at the bottom, crystallizing massive losses. “I should have listened to you about diversification,” he confessed over coffee.
But Mei Lin’s systematic approach served her well. Her quarterly rebalancing in June had actually increased her Berkshire allocation when it fell below 8% of her portfolio. Now, as prices cratered further, her rebalancing discipline forced her to buy more.
“It’s counterintuitive,” she explained to her worried mother, “but when good companies get cheaper, you want to own more of them, not less.”
Chapter 6: The Recovery
By 2029, markets had not only recovered but soared to new highs. Berkshire’s patient deployment of capital during the crisis had positioned it perfectly for the upturn. Greg Abel had proven himself not just as a capable successor, but as a strategic genius in his own right.
Mei Lin’s original S$50,000 Berkshire investment was now worth S$180,000. But more importantly, her disciplined rebalancing had allowed her to buy additional shares during the crisis, amplifying her gains. Her total Berkshire holdings were worth S$250,000.
“The key was never trying to predict which scenario would play out,” she reflected. “The key was being prepared for all of them.”
Chapter 7: The Wisdom
In 2035, ten years after her initial investment, Mei Lin looked back on her journey. Her total portfolio had grown to S$1.8 million, with Berkshire contributing significantly to that growth. But the real lesson wasn’t about Berkshire specifically – it was about the power of systematic thinking.
She had treated Berkshire not as a stock pick but as a strategic allocation. A way to get exposure to high-quality American businesses while benefiting from Singapore’s tax-friendly environment. A currency hedge that happened to be run by exceptional managers.
Speaking at a Singapore investment club meeting, she shared her philosophy: “Too many investors treat individual positions like lottery tickets – they either avoid them completely out of fear or bet everything hoping to get rich quick. But the real money is made by thinking systematically about portfolio construction and risk management.”
Chapter 8: The Legacy
Years later, as Mei Lin approached retirement with a multi-million-dollar portfolio, she often thought about that pivotal decision in 2025. Not the decision to buy Berkshire – that was just one of many good investments. The real decision was to approach investing systematically rather than emotionally.
She had never tried to time the market or predict specific outcomes. Instead, she had built a framework that could work across multiple scenarios. When Berkshire succeeded, she participated in the upside while managing concentration risk. When it struggled, her diversification limited the downside. When markets crashed, her rebalancing discipline turned volatility into opportunity.
Her nephew, fresh out of university and starting his own investment journey, asked for advice.
“Auntie Mei, should I buy Berkshire Hathaway? Everyone says Greg Abel is the next Warren Buffett.”
She smiled, remembering her own uncertainty decades earlier. “The question isn’t whether you should buy Berkshire. The question is how it fits into your overall strategy. What role would it play in your portfolio? How would you manage the risks? What would you do if it goes up 50%? What if it goes down 50%?”
“Think about it not as picking winners and losers,” she continued, “but as building a system that can thrive regardless of which specific outcomes occur. That’s the real secret to long-term investing success.”
Epilogue: The Principle
As Singapore’s skyline continued to evolve and global markets continued their eternal dance of fear and greed, Mei Lin’s principle remained constant: successful investing isn’t about predicting the future – it’s about building portfolios that can adapt to whatever future arrives.
Her Berkshire investment had been successful not because she had correctly predicted Greg Abel’s success, but because she had positioned it as one component in a larger, more resilient system. The same principle that had served Warren Buffett well – not trying to time markets, but building lasting wealth through patient, systematic investing – had served her equally well.
In the end, the greatest lesson from the Oracle of Omaha wasn’t about stock picking or market timing. It was about the power of principled, long-term thinking in a world obsessed with short-term outcomes. And for a Singapore investor blessed with favorable tax treatment and growing global opportunities, that lesson was more valuable than any individual investment could ever be.
The numbers and scenarios in this story are illustrative and not intended as investment advice. Past performance does not guarantee future results.
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