Why Is Bill Gates Dumping Berkshire Hathaway? Here's What It Really Means

Question

The Gates Foundation Trust just offloaded 2.4 million Berkshire Hathaway shares last quarter—and it’s not a random move. After digging into the numbers, two patterns emerge that tell us something about how top-tier investors are positioning themselves right now.

The “Cash is King” Signal

Berkshire Hathaway is sitting on $380 billion in cash. That’s insane—we’re talking about one-third of the company’s entire market cap just chilling in the vault. Why? Because Warren Buffett can’t find decent deals at current prices. The S&P 500 is trading at 30x earnings, nearly double its historical average. Skilled investors are basically saying: “Valuations are too high, we’d rather wait.”

Here’s the thing: if Berkshire is supposedly the “safety net” for nervous markets (30% cash cushion = buffer against drops), then why is Gates still selling? Answer: the Foundation’s portfolio managers are just as spooked as Buffett. Out of 25 holdings they track, they trimmed 12 positions last quarter and increased zero. That’s not casual rebalancing—that’s a red flag.

One Stock, 25% of the Portfolio

Even after the sell-off, Berkshire still represents roughly one-quarter of the Gates Foundation’s entire portfolio (down from 30%). Normally you’d want more diversification, right? But here’s the catch—Berkshire stock hit near all-time highs with a price-to-book ratio around 1.6, way above its usual 1.2-1.5 range over the past decade.

So Gates had two choices: hold an overvalued position that dominates the portfolio, or trim it near peaks and rebalance. They chose the latter. Buffett also skipped buybacks last quarter, which speaks volumes.

What This Actually Means

Yes, the Gates Foundation is technically supposed to distribute profits to charitable causes (so selling could just be funding operations). But they used to be net buyers in previous quarters—that behavior flipped.

The real message: when billionaires who preach “buy and hold forever” start lightening their biggest positions and hoarding cash, it’s usually because they think prices are stretched. It’s not panic—it’s preparation. They’re waiting for the next buying opportunity, and they want dry powder when it arrives.