Although the broad market has clocked impressive returns in 2024, with the benchmark S&P 500 Index, tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY), returning more than 20%, legendary investor Warren Buffett has been a cautious seller.

The Berkshire Hathaway (NYSE:BRK) (NYSE:BRK) chairman notably sold over $100 billion of Berkshire's largest holding, Apple (NASDAQ:AAPL), capitalizing on the tech giant's valuation and reducing exposure to preserve gains. Additionally, he offloaded substantial portions of Bank of America (NYSE:BAC), trimming Berkshire's stake below the critical 10% ownership threshold.

While it is hard to speculate on Buffett's actions, his decision to sell a bank might be tied to an anticipation of lower interest rates. Berkshire still owns about 10% of the stock, but now it is not required to file Form 4 with the SEC within two business days—it can file Form 13F as far as 45 days into 2025.

In addition to a solid orientation around the Fed's actions, Buffett's expertise in the insurance industry is noteworthy, as decades of ownership of GEICO give him a vantage point over the market.

Per the Kobeissi Letter, he now holds a record $288 billion of U.S. Treasury bills, which is $93 billion more than the Fed.

"Opportunities for investment that are open to the analyst who stresses quantitative factors have virtually disappeared..." Buffett wrote in May 1969, clarifying the decision to close down his $100 million Buffett Partnership, Ltd. However, in 2024, he's at the helm of one of the largest publicly traded companies in the world.

Buffett's investment preferences are fairly well-known. He seeks companies with a high return on equity (ROE) that demonstrate efficient use of capital and consistent profit margins that indicate financial health.

Furthermore, he favors the "product moat," or competitive advantage, as it creates long-term stability and growth, fends off competition, and sustains profitability. However, a cornerstone of Buffett's investing philosophy is his rigorous preference for buying assets at a discount to their intrinsic value.

This preference is so strong that he suspended Berkshire Hathaway's buybacks in the third quarter until the "price is below Berkshire's intrinsic value."

While there are still companies meeting Buffett's criteria, finding them at a bargain has become challenging – particularly at a size that would create a meaningful return for his $325 billion cash pile.

Berkshire Hathaway has returned 22.02% year-to-date.

• Can You Guess What Asset the Ultra-Wealthy Invest In Most? Here's A Hint: It's Not Stocks

Image created using artificial intelligence via Midjourney.