Warren – Earlybirds Invest

Warren Buffett’s tremendous success as an investor didn’t come from trying to time the market, nor from predicting which stocks would go up or down in the near term. Those are impossible tasks, he has noted on multiple occasions. Instead, the primary thing that Buffett and his team at Berkshire Hathaway (BRK.A 0.29%) (BRK.B 0.10%) do is try to determine whether a business, at that particular moment, is worth more or less than its market price.

That strategy has led to some phenomenal results. Berkshire Hathaway stock has grown at a compound annual rate of about 20% since 1965, when Buffett took control of what was then a failing textile business. To put that in perspective, the S&P 500 (^GSPC -0.01%) has produced compound annual returns of just 10.4% over that time.

As impressive as that may sound, it can be hard to grasp just how vast that difference becomes when compounding has decades to work its magic. From 1965 through 2024, an investment in the S&P 500 (with dividends reinvested) would have multiplied in value by about 390 times. The same investment in Berkshire would have risen by more than 55,000 times.

In short, buying stocks that are fundamentally worth more than the market thinks they are works. But in recent times, Buffett has concluded that many of the equities in Berkshire’s portfolio might not be worth as much as the market is paying for them. Further, he has found the pickings quite slim in terms of potential new equity holdings to buy. As a result, Berkshire Hathaway has been a net seller of stocks for 10 consecutive quarters. In that period, Buffett and his team have sold $174 billion more in stocks than they bought.

Two of the biggest positions recently getting trimmed at Berkshire Hathaway were Apple (AAPL 0.46%) and Bank of America (BAC 0.64%). The conglomerate cut its stakes in them by 67% and 39%, respectively. With some of the proceeds from those sales and others, Buffett has been piling into a high-yield investment that’s paying around 4.3% as of this writing.

Image source: The Motley Fool.

Cutting some of his biggest holdings

At one point, Apple stock accounted for more than half the value of Berkshire’s equity portfolio. Buffett first purchased shares of the iPhone maker in 2016 when it traded for around $25 on a split-adjusted basis. Over the next few years, he built a massive stake in the stock, pouring an estimated $36 billion into it by late 2018.

When Buffett made his initial investment in Apple, it was trading at a P/E multiple of around 10. That was an incredible value for the stock, even as the company was experiencing a downturn in net income. Buffett saw the value of the iPhone and the Apple ecosystem, noticing how attached people were to their smartphones. He expected the business to turn around, thanks to Apple’s brand strength, its leading position in smartphones, and its strong free cash flow. Sure enough, the stock soared over the next eight years.

But by late 2023, it had climbed to above 30 times earnings, which is an extremely high multiple for a company growing its earnings per share at a single-digit percentage annual rate. That was enough to convince Buffett to start taking some cash off the table. From October 2023 through September 2024, he sold more than two-thirds of Berkshire’s stake in the tech giant.

Apple remains the largest holding in Berkshire’s portfolio, accounting for nearly 22% of its value. But given its forward P/E of 29, it’s unlikely that Buffett plans to start adding to the position again in the near future, absent any significant developments.

Bank of America was Berkshire’s second-largest holding as of last summer. But over the last three quarters, Berkshire has trimmed its stake in the company by 39%. Bank of America remains Berkshire’s third-largest holding based on the company’s most recent 13F filing with the Securities and Exchange Commission. But Buffett may have continued selling the stock in the second quarter.

Berkshire’s original stake in Bank of America came from stock warrants received in connection with preferred shares Buffett picked up in 2011 through a special deal he made while Bank of America was struggling. Those preferred shares paid nice dividends, but in 2017, it became more lucrative to own the common stock instead. So, Buffett exercised his warrants and converted the preferred shares into common stock, then proceeded to gradually add to the position through 2020.

Again, valuation seems to be the biggest reason for Buffett’s decision to book some profits on his Bank of America investment. The stock’s run-up in price has been fueled by expectations that interest rates will decline. Bank of America has longer-dated debt on its balance sheet that struggled when the Federal Reserve was hiking interest rates, but that will leave it well positioned relative to its peers when interest rates decline. But as the stock price climbed over the past couple of years, its price to tangible book value did too. That ratio has exceeded 1.6 for much of the past year. It currently trades closer to 1.7, well above its 10-year average of 1.49.

The investment paying Berkshire $13.5 billion per year

Those massive stock sales put a lot of cash in Berkshire Hathaway’s coffers. As mentioned, Buffett’s stock sales outpaced his purchases by $174 billion over the past two and a half years. While a sizeable chunk of that cash went toward paying Berkshire’s massive tax bill from last year, almost all of the rest went toward a single investment holding.

As of the end of the first quarter, Berkshire held $314.1 billion in U.S. Treasury bills on its balance sheet. With those bonds delivering an average yield of around 4.3%, the company is in line to collect $13.5 billion in 2025 just from interest on its government bond holdings. That number could climb higher if Buffett buys more T-bills throughout the year.

A $13.5 billion payout for doing nothing but supporting the U.S. government isn’t a bad deal. Berkshire’s total income from operations in 2024 was $47.5 billion. But Buffett has made it clear that he would rather invest Berkshire’s growing pile of cash (Treasury bills are considered a cash equivalent) in equities instead of bonds.

“Berkshire shareholders can rest assured that we will forever deploy a substantial majority of their money in equities,” Buffett wrote in his 2024 letter to shareholders.

The challenge Buffett currently faces is that most stocks on the market are expensive from a valuation standpoint. That’s especially true for stocks that he could buy in quantities large enough that they could actually move the needle for a giant like Berkshire Hathaway. With nearly $350 billion to deploy, Berkshire’s universe of investable stocks is limited to those with large market caps that can absorb billions of dollars of capital. Unfortunately, large-cap stocks trade at much higher valuations these days. Illustrating that trend, the S&P 500’s forward P/E ratio has climbed above 22 to one of its highest levels since the dot-com bubble, save for a few quarters in 2020 and 2021 (ahead of the 2022 bear market).

If Buffett were a smaller investor with just a few million dollars to invest, he’d surely be able to find great opportunities in the market. The small- and mid-cap indices trade for around 16 times expected forward earnings. Even the equal-weight S&P 500 index trades at just 17.6 times earnings, reflecting the fact that smaller members of the index are trading at more attractive values than its largest components.

Investors who take the time to research individual companies outside of the largest and most well-known names in the market can find some great companies worth more than their current market values. And if you consistently buy those stocks, you can generate excellent returns over the long run.

“We wanna thank God for giving us the grace to give him a little glory in this building tonight,” rapper-slash-country hit-generator Jelly Roll said onstage in May at the 60th Academy of Country Music Awards. The speech came during an exultant performance of his collab with Shaboozey, “Amen,” which features the chorus, “Somebody say a prayer for me / ‘Cause the pills ran out and I still can’t sleep.” The song details a religious devotion earned through a struggle with darker forces. “Even a crooked road can still get you home,” Jelly Roll concluded.

Jelly Roll might seem like a surprising mouthpiece for this kind of preachy moment, but the song is a hit even outside the country bubble. In a recent article for Christianity Today, musicologist Kelsey McGinnis identified the work of artists like Jelly Roll, Brandon Lake, and Thomas Rhett as “barstool conversion rock,” a notably masculine form of music that sits adjacent to contemporary Christian music (CCM).

But that subgenre is far from the only religiously tinged music — created by everyone from devout evangelicals to open agnostics, from country artists to rappers — climbing the charts today; a number of pop songs are likewise courting the divine. Benson Boone’s “Beautiful Things,” which arguably functions as a direct-appeal to God, was a ubiquitous bop for most of 2024. Alex Warren’s “Ordinary,” a love song that easily doubles as a Christian worship song, has slowly climbed the charts over the past few months to become one of 2025’s biggest breakout hits (it’s currently No. 1 on the Billboard Hot 100).

By establishing an industry-leading sound and a distinct identity, in a time of increased polarization around religion, Christian-coded music has finally broken containment and conquered the airwaves.

Christian rock has been around for decades. What changed?

Thirty years ago, evangelical and secular culture were very much divided, says culture writer and religious historian Kristin Kobes Du Mez. “There was a much more cohesive, and even in many cases, all-encompassing Christian culture [for] kids raised in the 1990s,” she said. “It was possible to be completely insulated from secular culture. … I certainly grew up with the understanding that top 40 music was evil.” Christian radio, Christian record labels, and Christian bookstores all functioned as gatekeepers, vetting everything they passed on to consumers.

“There was a lot of money to be made in distinctively Christian merchandise,” Du Mez said. “But of course, it wasn’t presented as a business. It was presented as ministry and as evangelism.” It was also often considered hacky or trite. “The kind of joke about Christian culture is that they just copy what’s happening in secular spaces and then produce things of lower quality,” Du Mez said.

Switched on Pop’s Charlie Harding echoed this. Christian contemporary music used to sound like “whatever’s happening in pop music, five years too late,” he told me. A fan of a secular band could usually find a Christian equivalent and listen to that instead, guilt-free. Like other guilt-free treats, it might not quite hit the spot — but for decades, many Christians eschewed the pleasures of mainstream media, even as their own art trailed behind it.

Christian pop, however, was not the only form of Christian music available. There was also church worship music (also known as praise music). Worship music gained traction in the late ’70s and ’80s, when seminal CCM songwriters like Rich Mullins modernized the classic Protestant hymnal structure by combining it with the aesthetics of modern Black gospel, emphasizing a soaring, anthemic rock chorus that everyone could sing along to. This structure has come to define praise music ever since.

In the ’90s and early aughts, as megachurches and Christian conferences exploded in popularity, along with their concert-like worship services, worship music took on increased cultural significance. This music was meant to be sung by church congregations, intended to invoke or encourage religious euphoria, even conversion. It took a basic pop-rock style and imbued it with spiritual ambiance, codifying a big, church revival sound.

Then came the rise of the internet. The increased interconnectivity of diverse communities, the subsequent explosion of the smart phone and social media, and the demise of the cultural mainstay that was the Christian bookstore all meant Christians found it much harder, if not impossible, to totally isolate themselves from the rest of the world.

“Sometimes that’s just what they are and what they do. Sometimes that’s their truth.”

— -Todd Nathanson, YouTube music vlogger

This increased interaction with the secular world both coincided with and fueled the erosion of the Christian music industry, which also meant that the centers of distribution and influence for Christian art changed. Now, instead of getting Christian music mainly from Christian radio and CCM artists, many Christians began to encounter it most regularly through their weekly Sunday worship service — which offered not “pop music, five years too late” but worship music.

Now, musical artists who grew up in the church, hearing worship music week after week, were also hearing and interacting with secular music and culture. They could more freely mix and learn from different musical styles. And soon, instead of merely following behind pop music, Christian music instead helped spawn an enormously influential offshoot of its own sound — via the biggest band of the 21st century.

Harding identified Coldplay as the through line between all that aughts Christian worship music and songs like “Ordinary.” In a 2019 Rolling Stone interview, band frontman Chris Martin, who was raised Christian, spoke of being influenced as a child in the ’90s by church music — by “these beautiful, big songs.” That bigness, Harding said, is crucial to what came next. Specifically, Harding said, Coldplay’s 2005 hit “Fix You” popularized a song structure that’s now ubiquitous among today’s faith-adjacent pop music.

“Start infinitely small,” he said. “You’re down on your knees praying to God.” As it unfolds, “You can see the whole cathedral around you. You’re starting to have this divine experience.” That “infinite build” structure of “Fix You” now infuses the work of a huge number of highly successful artists of the ’10s and ’20s — think Arcade Fire, Imagine Dragons, or any number of “stomp clap hey” groups — and is still featured by Christian-associated artists like Benson Boone and Alex Warren. Whether intentionally or not, their music has incorporated the vibe of a Sunday worship service, and that vibe is shaping the industry’s sound rather than following it.

This musical wave may have emerged, however indirectly, from Christian culture, but it’s managed to transcend the awkward resonances of a post-Hillsong Justin Bieber, mid-spiral Kanye West, or the Creed Cruise.

Where we are now: Masculinity, politics, and hollering to God

As Christians lost the ability to isolate themselves from the secular world, they also started to see value in interacting with secular culture.

Du Mez suggests that whereas before, Christians intentionally isolated themselves from the mainstream, in the current era, some are increasingly willing to accept and embrace secular influences because they increasingly conflate Christianity with a right-wing social and political agenda. Thus secular media and products that are not distinctly Christian, but which nevertheless reflect or promote their shared social and political values, are finding welcome among Christians who might otherwise disregard them.

“It’s not always compatible with what most people would understand to be core Christian values or theological tenets, but if it hits [certain] masculinity talking points, if it provides an attractive vision of throwback femininity or even retrograde femininity, then it’s embraced by these spaces,” Du Mez said.

This new and evolving embrace of secular messaging arguably explains why so many Christians are warming up to (and pushing up the charts) country and rock artists who, despite referencing Jesus here and there in their lyrics, would once have been viewed by them as morally dubious. This contradiction serves as the essence of barstool conversion rock: moral messages coming from spurious messengers. In writing for Christianity Today, McGinnis marries barstool rock to both country music and to “a web of crisscrossing cultural threads, including conservative politics, party culture, and evangelicalism.” While this subgenre overlaps with the much-discussed wave of “bro country,” it adds a layer of respectability via an appeal to faith.

If each of these songs involves a reckoning between the singer and God, “even the reckoning is performed.”

Indeed, what unites all of these songs across a broad sonic range is their confessional stance, as well as the performance of raw vulnerability from each male artist — a trait that modern men, especially ones steeped in a culture of conservatism, often have difficulty accessing. At the nexus of Jelly Roll’s gritty but spiritual collaborations and Morgan Wallen exiting Saturday Night Live for “God’s country” resides a desire for something deeper than just the average dirty-booted drinking song. In so many of these songs, the singer aims to find a way to express his own weakness, a familiar cry among isolated white men that contributes to these songs’ popularity.

Music critic Craig Jenkins (of Vox sister site Vulture) told me he thinks Boone’s “Beautiful Things” succeeds at this project. “Emotional, searching pop-guy songs will absolutely never lose steam,” Jenkins said.

Boone, who is no longer a practicing Mormon but does not drink or do drugs, is an interesting case, especially in his aesthetics. With his spangled jumpsuits and mustache/mullet combo, he’s somewhere between Elton John and Morgan Wallen. “The signifiers all feel very queer, but the presentation is like, lacrosse player crushing it in glee club,” Jenkins said.

Jenkins questions if Boone is “carelessly laundering stuff that used to be edgy into a teetotaling package that is just coincidentally very palatable for the most crotchety sensibilities,” or if his choices are more intentional. He ties Boone to post-punk creatives like Panic! At the Disco’s Brendon Urie and The Killers’ Brandon Flowers, who like Boone were both raised as Latter-Day Saints. This cacophonic whirl of musical antecedents reads like someone who’s going through a familiar post-adolescent Mormon journey of working out his identity beyond his family, church, and childhood.

Todd Nathanson, creator of the YouTube music vlog Todd in the Shadows, emphasizes that the authenticity is part of the package. “You don’t want to be too cynical about this because Alex Warren is an actual practicing Catholic, and you can’t expect someone to not let that inform his music,” he said. “Sometimes that’s just what they are and what they do. Sometimes that’s their truth.”

The other key to understanding this music is that while so much of its appeal is its perceived authenticity, its strength also lies in its ability to market a version of traditionalism that feels inviting, rather than alienating.

Though artists like Boone and Warren may not bear much sonic affinity with Jelly Roll or Wallen, thematically they all share an ability to express a yearning for the identity of a masculine, working-class hero, eschewing delusions of grandeur for a smaller life. These songs seem to pair images of modern masculinity with visions of a traditional lifestyle, tailored to appeal to audiences that don’t often find themselves reflected in pop music except through working-class anthems. Think of John Mellencamp’s admonition that “I can breathe in a small town,” paired with Warren’s vow to “make the mundane our masterpiece.” These lyrics are tropey, even trite, but they’re effective in breathing new life into old populist narratives.

The video for Warren’s “Ordinary,” for example, sees him pursuing a chastely styled woman (played by his real-life wife) with all the apparent wonder of a schoolboy seeing a woman for the first time. It’s both a bizarrely infantilized version of masculinity and a highly romanticized, extremely traditional view of love. It’s also hugely popular.

“There’s a synergy of thought in bro spaces that aren’t religious and ones that are,” Jenkins noted, with “treatises on how Your Woman should dress on both sides of the coin.” In an Alex Warren video, that vision of femininity isn’t so threatening.

Nathanson also points to artists who dabble in faith-adjacent themes, like Hosier and Noah Kahan, as proof of the marketability of this traditionalist message. “That kind of music is just doing very well right now,” he said — so well that other artists might be trying to gain a large market by adding “a couple of ‘Gods’ or references to heaven.”

“A lot of people see that type of proselytizing as a quick way to gain influence and a quick way to gain access and a foothold and an audience,” Nathanson added.

“Rugged and questioning is lucrative posturing in deeply weird times,” said Jenkins, who’s more cynical than Nathanson about the end result. If each of these songs involves a reckoning between the singer and God, he notes that “even the reckoning is performed.”

Beyond any cynicism, there are complex social messages to parse in this new space. For one, it’s perhaps ironic that the regressive male codes of stoic masculinity that leave these male artists seeking outlets of expression are frequently heavily reinforced by the same Christian culture they’re trying to find themselves within.

Ultimately, Harding stresses the reality of a new conservative audience making its mark on the charts. “I think that there’s something that’s really connecting with people, and I think that probably has to do with a lean toward tradition and representations of masculinity, which are currently at loggerheads in our world,” Harding said.

Whatever it is, he says, people really must like it. “I always believe that things that pop off do have an actual resonance,” he said, “because it’s so hard to make a hit.”

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Standing out in finance

Gaining momentum

A longtime Buffett favorite

Operating from a position of strength

Tremendous capital returns

Taking a cautionary view

Apple’s stock is no longer cheap

Buffett may be freeing up more cash for the incoming CEO

1. Amazon

2. Visa

3. Mastercard

4. Apple

5. Chubb

Cutting some of his biggest holdings

The investment paying Berkshire $13.5 billion per year

Christian rock has been around for decades. What changed?

Where we are now: Masculinity, politics, and hollering to God

Visa

Apple

Chubb