Warren Buffett, the famous investor and one of the richest individuals in the world, built his fortune primarily through his holding company, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B). Today, Berkshire Hathaway is worth nearly $1 trillion; its success is the culmination of a strategy of buying and holding numerous private companies and stakes in public corporations.

Owning Berkshire Hathaway stock is as close as you can get to investing alongside Buffett.

But valuations take each investment into account. Buffett, a notorious value stickler, would probably tell you that there is no stock you should buy at any price. It’s essential when deciding whether to buy, sell or hold Berkshire Hathaway stock today.

So which one is it? Here’s what you need to know.

The internal workings of Berkshire Hathaway or anyone else holding company they may seem like murky waters. There are so many moving parts that the head can spin. But if you think about it, a holding company is a business that owns other businesses.

Berkshire Hathaway owns dozens of private companies, including railroads, GEICO Insurance, Dairy Queen, See’s Candies and more. They operate independently and their profits go to Berkshire (parent company). If Berkshire Hathaway’s holdings in public companies pay dividends, they go on Berkshire’s balance sheet in the same way. Some of Berkshire Hathaway’s notable investments include stakes in Apple, Bank of America, American Expressi Coke.

In a way, we as investors are all our own holding companies.

There, Buffett and the rest of Berkshire Hathaway’s management team decide how to use the money to create value for the company’s shareholders. This could involve acquiring or investing in companies, buying back shares of Berkshire Hathaway, or doing something else.

The Berkshire Hathaway team has created immense value for its shareholders. You can see this reflected in the company’s book value over the years below:

Ultimately, this chart explains why Buffett and the rest of Berkshire Hathaway’s long-term shareholders have done so well. It doesn’t guarantee Berkshire Hathaway’s future success, but it should give investors confidence in its ability to operate through economic ups and downs and a changing world.

So what’s the problem? Maybe you can guess Buffett’s age. Of course, he’s 90 years old, something worth considering if you’re thinking decades into the future. But that has already been thought of. Buffett’s the successor has been with the company for years and he probably deserves the benefit of the doubt, especially considering how financially equipped Berkshire Hathaway is. The company currently has about $325 billion in cash, a financial arsenal ready for the right opportunities.

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My concern probably boils down to Buffett’s main investment principle: value.

Using book value, the same metric by which we measure Berkshire’s growth, the stock is near its highest valuation in a decade:

Not to get too hung up on what anyone else does (or doesn’t do), but Berkshire Hathaway didn’t buy back any of its Class A or Class B shares in the third quarter of 2024. Maybe that will change when the company reports Q4. .quarter results, but it doesn’t look like Buffett and Co. see a lot of value at these prices. On the other hand, Berkshire Hathaway has mostly sold shares to increase its cash reserves in recent quarters.

You may have seen it coming, but it’s hard to call Berkshire Hathaway a buy today. Buffett’s reluctance to buy back his shares is noteworthy, but his high valuation relative to historical norms is enough to hold. However, Berkshire Hathaway is a clear winner and an excellent stock to buy and hold in a diversified portfolio. You don’t part with these stocks easily, so investors should think twice before selling if they already own them.

If Berkshire Hathaway’s valuation returns to its historical averages or the company makes a blockbuster acquisition with its cash, the stock can charge right back into buy territory. For now, just sit back and wait for things to play out.

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American Express is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Justin Pope holds positions at Coca-Cola. The Motley Fool has positions in and recommends Apple, Bank of America and Berkshire Hathaway. The Motley Fool has one disclosure policy.

Berkshire Hathaway: Buy, Sell or Hold? was originally published by The Motley Fool