The Federal Reserve just blinked. On December 10, the FOMC slashed rates by another 25 basis points to a range of 3.50% to 3.75%. It was a fractured 9-3 vote, the kind of dissent we have not seen in years. Vice Chair John Williams is leaning dovish, while the hawks are screaming about a return of inflation. In the middle of this chaos sits Berkshire Hathaway, clutching a record-shattering $382 billion cash pile. This is no longer a safety net. It is a strategic indictment of the current market valuation.
For weeks, the rumors swirled. Then, on December 8, 2025, the news broke. Todd Combs is stepping down as CEO of GEICO. Nancy L. Pierce has taken the reins of the insurance giant. To the casual observer, it looks like a retirement. To those following the money, it is the conclusion of a masterclass in operational triage. Combs did not just manage a portfolio. He spent five years inside the engine room, gutting the inefficiencies that nearly sank the insurer in 2022. He leaves behind a gem that is finally polished, but the questions about Berkshire’s equity future have never been louder.
The Great Equities Retreat
Berkshire’s Q3 13F filing, released via SEC.gov, confirms a brutal reality. The retreat from Apple and Bank of America has not slowed. Warren Buffett and his lieutenants have liquidated over $130 billion in stock throughout 2025. While the S&P 500 hovered near all-time highs this summer, the Omaha conglomerate was aggressively building its fortress. They are not buying the dip. They are waiting for the floor to fall out.
The Alphabet (GOOGL) entry was the lone bright spot in a sea of red tape. The $4.34 billion stake suggests that while they are skeptical of the broader tech bubble, they are finally seeing value in the communication services floor. However, the most telling metric remains the cash position. It has nearly tripled since the pre-pandemic era. When the math does not work, the Oracle does not play.
The GEICO Turnaround and the Combs Legacy
Todd Combs did the dirty work. He inherited an insurer that was bleeding market share to Progressive and failing to leverage telematics. According to the December 2025 internal performance review, GEICO’s underwriting profit for 2024 hit a staggering $7.8 billion. This was a complete reversal of the $2 billion loss in 2022. Combs achieved this by slashing headcounts by 30% and overhauling the pricing algorithms.
But the victory came at a cost. GEICO lost its crown as the second largest auto insurer in the United States to Progressive. Combs chose margins over volume. He chose the balance sheet over the billboard. Now that he has stepped back from the CEO role at GEICO to focus exclusively on capital allocation, the market expects him to deploy that $382 billion into something more productive than short-term Treasuries. The yield on the 10-year Note just touched 4.19%, according to Bloomberg data from December 12. For the first time in a decade, holding cash actually pays a premium.
| Holding | Action (Q3-Q4 2025) | Estimated Portfolio % |
|---|---|---|
| Apple Inc. (AAPL) | Reduced by 15% | 22.69% |
| Bank of America (BAC) | Reduced by 6.1% | 10.96% |
| Alphabet Inc. (GOOGL) | New Stake Added | 1.62% |
| Chubb Ltd. (CB) | Increased by 15.9% | 3.31% |
The LatAm Gamble and Digital Disruption
While the heavy hitters are being trimmed, the neobank experiment continues. Nu Holdings (NU) remains the wildcard. Despite cutting the stake by over 50% in early 2025, the remaining position has outperformed almost everything in the traditional financial sector. NuBank is the most anti-bank entity in the portfolio, yet it fits the Combs-Weschler mandate for high-margin, high-growth disruption. By December 2025, NuBank reported over 114 million customers globally, proving that the digital-first model in emerging markets is far more resilient than the lumbering US regional banks currently struggling with interest rate volatility.
The risk is obvious. If the Fed continues to cut rates into a stubborn inflationary environment, the value of Berkshire’s cash will erode in real terms. But Buffett and Combs have always played the long game. They are waiting for the moment when leverage becomes a liability for everyone else. With Greg Abel slated to take the full CEO title by the end of this month, the transition is nearly complete. The stage is set for a massive acquisition, but the price tag must be right.
The next major data point arrives in February with the 2025 Annual Letter. Analysts are specifically looking for the combined ratio targets for GEICO under Nancy Pierce’s first full quarter. If that number slips above 85, the Combs turnaround may have been a temporary fix rather than a permanent cure. Watch the 2-year Treasury yield on January 15. If it breaks below 3.4%, expect Berkshire to start moving that cash into high-dividend consumer staples before the yield curve flattens completely.
