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Following a devastating sell-off in the markets last week, U.S. tech stocks experienced severe fluctuations again in trading on April 7. Major tech stocks such as Apple, Microsoft, and Tesla closed lower, with Apple seeing a decline of nearly 4%. In contrast, Alphabet (the parent company of Google), Amazon, Meta (the parent company of Facebook), and Nvidia saw gains of 1.02%, 2.49%, 2.28%, and 3.53%, respectively.
In summary, the market capitalization of the “Magnificent Seven” tech giants evaporated by more than $1.8 trillion (approximately NT$59.3 trillion) during just two days of sell-offs, and the Nasdaq Composite index recorded its worst weekly performance since the outbreak of the Covid-19 pandemic, entering a bear market.
U.S. Tech Giants Plummet, Only Buffett Gains $11.5 Billion
According to the Bloomberg Billionaires Index as of April 8 Taiwan time, most individuals in the global top 10 billionaires list saw their net worth decrease by nearly $1 billion or more year-to-date. Tesla founder Elon Musk’s wealth shrank by $135 billion (approximately NT$4.44 trillion).
Remarkably, only “Oracle of Omaha” Warren Buffett saw his assets increase by $11.5 billion (approximately NT$379.1 billion). How did he achieve this despite the market downturn?
How Did Buffett Profit Against the Odds?
During the most severe market decline since the onset of the Covid-19 pandemic in 2020, Buffett’s wealth did not diminish but instead grew. In just two trading days, the world’s 500 richest people collectively lost over $500 billion (approximately NT$16.49 trillion), marking the largest decline ever recorded by the Bloomberg Billionaires Index.
As of April 8, the world’s richest person, Musk, has seen a year-to-date decrease of over $135 billion, while the second richest, Bezos, lost $42.6 billion. Zuckerberg, now ranked third, lost $24.5 billion, and Bernard Arnault of LVMH, currently fifth, fell by $26.2 billion. Even Bill Gates, in sixth place, saw a reduction of $9.45 billion, bringing his assets down to $149 billion, slightly below Buffett’s $154 billion, who is currently the fourth-richest.
Overall, year-to-date, Buffett’s assets have increased by $11.5 billion, making him the only individual among the top 10 billionaires to have seen an increase in wealth in 2025.
What Are Berkshire’s Successful Strategies?
Buffett’s success can also be attributed to his foresight in reducing stock holdings in 2024. As the bull market raged on, Berkshire sold off $134 billion worth of stocks, demonstrating Buffett’s prediction of an impending market downturn.
- Substantial Cash Reserves and Short-term Treasury Investments
Berkshire significantly increased its cash and liquid asset reserves to a historic high of $334 billion in 2024, even surpassing the remaining $272 billion of its slimmed-down stock portfolio. Most of this capital was invested in short-term Treasury bills, providing shelter during market storms while generating considerable income. As Buffett noted in his recent shareholder letter: “With rising Treasury yields and our substantial increase in holdings of these high-liquidity short-term securities, we have achieved a significant growth in investment income.” - Foresight in Reducing Overvalued Stocks
During the bull market in 2024, Buffett sold a large amount of stocks, including shares of Apple. He reduced his Apple holdings by about two-thirds, with the sales primarily occurring in the first three quarters of 2024 when Apple’s stock price was still rising, peaking at around $260 per share by the end of December. Since 2025, Apple’s stock price has fallen by 25%, as U.S. tariffs on China are expected to severely impact tech companies like Apple that rely on Chinese components and manufacturing. Additionally, Buffett reduced his stakes in financial stocks such as Bank of America and Citigroup, avoiding significant declines in these stocks, which have dropped 19.67% and 15.86%, respectively, so far this year. - Increased Investment in Japanese Trading Companies
Berkshire chose to increase its investment in Japan’s five major trading companies (Mitsui, Mitsubishi, Sumitomo, Itochu, and Marubeni), which play a significant role in the Japanese economy. By diversifying its portfolio, it effectively reduced reliance on the U.S. market while generating stable dividend income. According to Buffett’s February 2025 shareholder letter, Berkshire’s annual dividend income from its Japanese investments is expected to reach $812 million, while the interest cost on yen-denominated debt is only about $135 million. - Stability of the Insurance Business
Berkshire’s insurance operations, including Geico and the reinsurance group, are a crucial source of the company’s stable profits. Despite the S&P 500 index dropping 13% so far this year, Berkshire (BRK.B) has risen 8.7%. Historical data shows that Berkshire’s property/casualty (P/C) insurance business has been a growth engine since its acquisition in 1967. Insurance float allows Berkshire to invest more in high-yield common stocks rather than low-yield bonds, as customers pay premiums upfront while claims are typically paid much later, allowing for flexible and high-return investments. - Diverse Investments and Stable Sectors
In addition to insurance, Berkshire also focuses on other stable sectors such as energy and railroads. In 2024, the company acquired the remaining 8% stake in Berkshire Hathaway Energy (BHE), achieving full ownership, and continues to hold assets like BNSF Railway, which have shown relative stability during market fluctuations. Furthermore, in the fourth quarter of 2024, Berkshire invested $1.24 billion in Constellation Brands, a beverage company that may be seen as a more stable investment option.
Berkshire’s Three Major Investment Philosophies
As of April 8, 2025, Berkshire’s stock (BRK.B) has grown 8.7% year-to-date, while the S&P 500 index has dropped 13.74%, demonstrating its resilience amid recent market pressures. This performance may be attributed to its insurance business’s insulation from global trade issues and investors’ expectations of Buffett’s ability to invest amidst market chaos. For instance, among Berkshire’s portfolio, VeriSign (which provides .com domain registration services) has grown over 14% so far in 2025, becoming one of the best-performing U.S. stocks, despite its relatively small holding percentage.
Buffett consistently adheres to the principle of “value investing,” focusing on a company’s intrinsic value rather than short-term market fluctuations. He emphasizes maintaining cash liquidity to cope with market uncertainties and staying calm when others panic. His strategies include:
- Long-term Perspective: Buffett typically invests with the mindset of buying a company rather than merely holding stocks.
- Avoiding Losses: His famous investment rule is “never lose money,” and he maintains discipline to manage market risks.
- Flexibility: He adeptly adjusts his portfolio based on market conditions, such as reducing holdings in overvalued stocks and seeking diversification opportunities.
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Sources: Fortune, New York Post, Business Insider, Bloomberg
Editor: Lee Hsien-tai