The trades that make headlines are almost never the ones worth studying. The big number grabs the room. The small one, buried near the bottom of a filing, is usually where the thinking lives.
For the first half of 2026, money moved in one direction with very little subtlety. Fund managers chased artificial intelligence infrastructure, bid up anything attached to a data center, and treated cash as something to apologize for.
Hanging over all of it was a succession question. Warren Buffett stepped down as Berkshire Hathaway (BRK.B) chief executive on Dec. 31, 2025, handing the company to Greg Abel after roughly six decades at the helm.
Investors wanted to see what Abel would do with his first real turn driving. When his opening quarterly portfolio filing landed in May, the crowd went straight for the biggest line item, a $2.65 billion bet on Delta Air Lines (DAL).
That was the loud trade. The quiet one sat a few rows down, a position so small it barely registered against Berkshire’s hundreds of billions, in a retailer most of Wall Street had written off years ago.
It was Macy’s (M).
Why the new Berkshire reached for a written-off retailer
The size of the Macy’s stake is the tell, not a rounding error. Buffett’s long-running habit was to open small and scale up only if the thesis held.
The position came to roughly 1% of the retailer, worth about $55 million at the end of the first quarter, according to Kiplinger. Against a portfolio measured in hundreds of billions, that is a whisper.
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This was Berkshire’s first public department-store investment since 1966, when Buffett and Charlie Munger bought Baltimore’s Hochschild Kohn and learned how unforgiving the business could be, noted The Motley Fool. Buffett spent the decades after that calling retail a tough, low-moat game.
So a return to the aisles says something shifted, either in the price or in the asset. Macy’s shares had lost nearly 40% over the prior decade, by The Motley Fool’s count, which is exactly the kind of wreckage that turns a brand name into a value play.
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The disclosure arrived in Berkshire’s first-quarter 2026 Form 13F, filed with the Securities and Exchange Commission (SEC) on May 15, 2026. In the same filing, Abel cleared out 22 names, many of them inherited from a portfolio manager who left for JPMorgan Chase (JPM), and tripled Berkshire’s Alphabet (GOOGL) position.
The Macy’s buy was easy to miss in the noise, which is part of why TheStreet flagged the $55 million purchase the week it surfaced.
When I lined up that tiny Macy’s stake against the $2.65 billion Berkshire put into Delta Air Lines the same quarter, the size gap did the talking. One is a conviction bet. The other is a toe in the water, the kind Buffett dips before he ever commits real money.
What Macy’s owns beneath the markdowns
Strip away the dying-mall story and Macy’s is sitting on hard assets. The company owns 243 of its 665 stores, including the 1.1 million-square-foot Herald Square flagship in Manhattan, independently valued at between $1 billion and $3 billion, according to Barchart.
That property base has drawn activist investors and even a takeover bid in recent years, Barchart reported, because the real estate alone may be worth more than the whole company’s market value. For a buyer who thinks in decades, that is a floor under the share price.
The turnaround is finally posting numbers, too. Here is what the new Berkshire would have seen on the books before buying:
- The stock pays a $0.1915 quarterly dividend and yields around 3.5%, which makes it a coupon-clipping holding while management executes, according to 24/7 Wall St.
- Comparable sales rose 3% in the first quarter, the strongest first-quarter showing in four years, reported CNBC.
- The 200 upgraded Reimagine stores grew comparable sales 2.4%, while Bloomingdale’s jumped 10.2%, CNBC confirmed.
- Shares change hands near 9.5 times forward earnings, cheap against the broader market, based on data from FinanceCharts.
CEO Tony Spring frames the comeback plainly, telling CNBC the company is “reinvesting in the fundamentals, like better staffing and assortment.” Macy’s is about two years into a three-year plan built on shutting dead-mall locations and pouring money into the stores it keeps.
That is the kind of self-funded, unglamorous fix Buffett has rewarded before. It does not need a booming economy to work, only management that stops trying to be clever.
Why chasing this trade now misses the point
Here is the part the headline owes you. The easy money is already gone.
Macy’s has more than doubled over the past year, up about 126%, according to 24/7 Wall St. Anyone who tried to copy Berkshire when the filing went public in mid-May paid roughly 18% less than the late-June price.
Copying the position today means buying a department store after a double, at a multiple that is no longer obviously cheap, with tariffs nicking gross margins and planned store closures pulling about $145 million in annual sales out the door.
What struck me running those numbers is that the trade and the lesson have come apart. You cannot get Berkshire’s entry anymore.
You can still get Berkshire’s reasoning. It means buying durable cash flow and tangible assets when the story is ugly and the price reflects fatigue rather than real failure.
That reasoning travels. It works on the next unloved name long after the Macy’s headline fades.
Buffett put the spirit of it in a 1988 shareholder letter that Kiplinger still quotes, calling his “favorite holding period” forever. The point was never to time a bottom. It was to own the right business long enough that timing stops mattering.
If the upgraded-store comps hold, Berkshire’s cost basis looks smart. If they stall, the real estate is the backstop. Either outcome rewards patience over reflexes.
For the saver deciding what to do on Monday, the move is not to pile into Macy’s near $24 and pray the filing crowd is right.
It is to keep a short list of sound businesses the market has quietly given up on, and to hold cash ready for the day one of them goes on sale the way this one did a year ago.
If Abel adds to the stake in the next filing, it’s your signal that the toe in the water became conviction.
Until then, the cheapest thing in this whole trade was never the stock. It was the idea.
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