The article says the US housing market has stayed frozen nearly five years after the pandemic, with mortgage rates above 7%, stubborn inflation and rising home prices keeping existing home sales around 4 million a year, versus 5.5 million before the pandemic. Berkshire Hathaway, under CEO Greg Abel, has expanded aggressively in homebuilding, buying Taylor Morrison for $6.8 billion, owning 11% of Lennar and holding stakes in NVR and D.R. Horton, making it the nation's 4th-largest homebuilder. The author, however, sold part of a homebuilder ETF after more than two years of losses, citing high mortgage rates, rising building costs, labor shortages, tariffs and price cuts that pressure margins. The author expects mortgage rates may stay high for years as the Fed signals rate hikes, and prefers stocks that create their own success rather than waiting for macro conditions to change.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on fool.com ↗
Related news
- Buffett's Berkshire Is Going Long on Homebuilders. Here's Why I'm Moving in the Opposite Direction
The U.S. housing market remains stuck nearly five years after the pandemic, with mortgage rates above 7%, sticky inflation and rising home prices keeping existing home sales near 4 million a year, versus an average of 5.5 million before the pandemic. Homebuilder stocks have been flat for several years while the broader market surged. Still, Berkshire Hathaway has been aggressively buying into the sector: it acquired Arizona-based Taylor Morrison for $6.8 billion, combined it with Clayton, bought South Carolina homebuilder McGuinn, and nearly doubled its stake in Lennar to 11%, making Berkshire the nation's fourth-largest homebuilder. The author, however, sold part of the State Street homebuilder ETF, XHB, after more than two years at a loss, arguing that high rates, building costs, labor shortages, tariffs and price cuts have squeezed margins, and that relief may take years.
- Berkshire Hathaway Outperformed the S&P 500 Over a 60-Year Period Under Warren Buffett. Here's the Stock That Could Help Continue the Streak Under Greg Abel.
From 1965 through 2025, Berkshire Hathaway under Warren Buffett delivered a 19.7% annualized return, versus a 10.5% average annual total return for the S&P 500. Greg Abel is now CEO. The article highlights Alphabet as a possible driver of future gains: Berkshire disclosed the stake in Q3 2025, and it is now its third-largest holding at 3.4% of market capitalization. Alphabet shares rose 49% in the 12 months to Oct. 13 and trade at a forward P/E of 22.8. The article also notes that Berkshire’s scale and $359 billion cash pile could weigh on returns, while Alphabet’s capex is set to total $200 billion in 2026 and free cash flow turned negative in Q2.
- Warren Buffett Warned About Stock Valuations. So Why Is Berkshire Still Buying Stocks?
In an early-May CNBC interview, Warren Buffett answered “Yeah” when asked whether stock prices were too high, saying many things would look very silly. From May 1 (7,230.12) to Oct. 15 (7,744.06), the S&P 500 rose 7%. Even so, Berkshire Hathaway became a net buyer of stocks in Q2 for the first time in three and a half years, buying about $23.5 billion while selling about $3.7 billion, and it bought back $4.5 billion of its own stock. It also invested in Alphabet, now nearly 13% of its equity portfolio, and in the recent IPO of Bending Spoons, with $600 million in July and $330 million in a private placement this month. The article notes Bending Spoons trades at 29 times forward earnings and will carry significant debt, so it is not a bargain in the traditional sense.
- Berkshire Hathaway (BRK.B) After Buffett: Can Its Capital Allocation Machine Keep Compounding?
Berkshire Hathaway (BRK.B) returned 10.56% over the six months to October 15, versus 21.5% for the Insider Monkey Billionaire Index and 15.74% for the State Street SPDR S&P 500 ETF Trust. Since Greg Abel became CEO, the company invested about $10 billion in Alphabet in the second quarter of 2026, repurchased roughly $4.5 billion of its own shares and acquired homebuilder Taylor Morrison for about $6.8 billion. Its insurance float stood at approximately $177.5 billion at the end of June, and after 14 consecutive quarters as a net seller of stocks, Berkshire bought more equities than it sold in the second quarter. The company also invested $600 million in Bending Spoons' July IPO and $330 million more in October, lifting its stake to 4%. The article notes BRK.B's trailing P/E of 12.75x versus a forward P/E of 22.73x, attributes the gap to how investment gains and losses flow into reported earnings, and cautions against drawing conclusions from either figure alone.
- Warren Buffett Says He Has "Never Felt Better" About Berkshire Hathaway's Future as He Steps Down as Chairman at 96
Warren Buffett, who built Berkshire Hathaway into a $1.1 trillion company, handed the chairmanship to his son Howard and remains as chairman emeritus at age 96. In a 2014 letter, he said the chance of permanent capital loss for patient shareholders is as low as can be found among single-company investments, because intrinsic value per share is almost certain to advance over time. Greg Abel, a longtime Berkshire manager who has led its energy operations, was chosen as successor CEO, and Buffett said in his farewell letter that his expectations for Abel were sky high and have been exceeded. Buffett also said he has never felt better about what comes next. The article notes BRKB's forward P/E of 25.6 is above its five-year average of 21.2, and considers the shares reasonably valued or a bit overvalued.
- Berkshire shares buck market sell-off, rally to highest since Buffett said he would step down as CEO
Berkshire Hathaway's BRK.A shares closed Friday at $798,000, just 1.4% below their all-time closing high of $809,350, while the B shares finished at $532.02. The recovery has been helped by CEO Greg Abel's $4.5 billion of buybacks in Q2, roughly $360 billion in cash, higher short-term interest rates, a quiet hurricane season, and a $19 billion Chevron stake that hit an all-time high. Berkshire also invested a further $330 million in Bending Spoons at $33 per share, and the stock closed at $47.07, 42.6% above that price. The shares had fallen more than 14% in the three months after Buffett's May 2025 announcement, as investors worried the 'Buffett premium' was dissolving.
Related markets
Latest news
- Winning over Vingroup and Sun Group with concrete and special materials: Vietnamese company's profit up 136%, chairman speaks out
Song Da Cao Cuong (SCL) reported Q3/2026 profit of VND 38 billion, up 136%, on net revenue of over VND 263 billion (up nearly 98%), while gross profit margin rose from about 36% to 41%. For the first nine months, revenue reached nearly VND 666 billion (up 81%) and after-tax profit nearly VND 94 billion, already exceeding more than 110% of its full-year profit target. Chairman Kieu Van Mat attributed the results to technology upgrades, production line optimization and capacity expansion, with several new plants expected to start operations by November 2026. The company said it spent more than two years testing its products before Vingroup accepted them; Vingroup's share of its business has fallen to about 25% as customers expanded to around 10 major groups and exports began to Laos, Cambodia and the Philippines. Over the past two years, the company has invested about VND 1,000 billion in factories and technology.
- Coteccons Chairman Bolat Duisenov reveals new direction: expanding home construction for individual customers
At the annual general meeting on October 20, Coteccons (HoSE: CTD) set fiscal 2027 targets of VND 42,000 billion in revenue and VND 1,050 billion in after-tax profit, and said it is considering expanding into residential construction for individual customers (B2C). In fiscal 2026, net revenue reached VND 34,340 billion (up 38%, 115% of plan) and after-tax profit VND 788 billion (up 73%); new contract wins totaled VND 60,307 billion and backlog was about VND 70,000 billion. In the first quarter of the new fiscal year, the company booked revenue of VND 11,270 billion and profit of VND 306 billion, but new contract value of VND 14,519 billion was lower than a year earlier; the company said it is tightening criteria for selecting clients and projects. Coteccons is also working with Microsoft, is expected to become a strategic partner of Workday, and targets raising its ROE from 10% to 15-18% by 2030.
- UPS Yields 6.7% After Firing Amazon. Here's Whether the Dividend Survives 2027.
UPS shares yield 6.7% as of October 16. The company has moved away from high-volume, low-margin Amazon deliveries and froze its dividend earlier this year, ending a 16-year streak of increases. The article says the payout will likely remain frozen through 2026 and 2027, citing competition from 10- and 30-year Treasury yields above 5% and other industrial dividend payers, but calls the dividend's safety questionable: UPS generated $5.47 billion in free cash flow in 2025, with $5.4 billion going to dividends, and free cash flow is projected to fall to $5.05 billion in 2026 and $5.01 billion in 2027, with the dividend absorbing about 98% of 2026 free cash flow. Rising competition and high fuel prices add pressure, and the article suggests investors may find more safety in the industrial sector.
- Asian shares mostly decline after AI stocks lead a rebound on Wall Street
Asian shares mostly fell in cautious trading on Tuesday after AI-related stocks rebounded on Wall Street, while other sectors stayed shaky and oil prices stayed high. Japan's Nikkei 225 slipped 0.6% to 64,512.35 in early trading, South Korea's Kospi dropped 2.8%, and Australia's S&P/ASX 200 lost 0.8%. On Wall Street, the S&P 500 rose 0.4% and the Nasdaq gained 1.1%, helped by Nvidia's 1.4% gain, while most stocks outside AI and tech fell and the Dow slipped 0.1%. The 10-year Treasury yield climbed to 5.14%, and U.S. crude rose to $103.50 a barrel and Brent to $109.47, as uncertainty about when the energy industry will return to normal after the war with Iran means oil is unlikely to ease soon.
- Asian shares mostly decline after AI stocks lead a rebound on Wall Street
Asian shares mostly fell in cautious trading Tuesday after AI-related stocks rebounded on Wall Street, while other sectors stayed shaky and oil prices remained high. Japan's Nikkei 225 slipped 0.6% to 64,512.35, Australia's S&P/ASX 200 lost 0.8% to 8,772.10, and South Korea's Kospi dropped 2.8% to 5,605.31. On Wall Street, the S&P 500 rose 0.4% and the Nasdaq rallied 1.1%, helped by Nvidia, while the Dow fell 0.1%. The 10-year Treasury yield climbed to 5.14%, and U.S. crude rose 0.15% to $103.50 a barrel as uncertainty over the war with Iran kept oil prices elevated.
- What Could X-Energy (XE) Gain From Its 960MW Indiana Nuclear Project?
X-Energy (NasdaqGS:XE), American Electric Power and Amazon agreed to assess a 960 MW advanced nuclear project in Indiana using Xe-100 reactors, on a former coal plant site. Under the joint development agreement, Amazon would provide development funding and commit to a long-term power purchase. The article says the deal offers commercial validation for X-Energy's reactor platform rather than immediate financial relief, as the company, with a $4.3b market cap, reported $150.28 million in revenue, a $448.87 million loss, and a 20.2x price-to-sales ratio. The next key milestone is whether the study reaches a final investment decision for the Sullivan County site.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.