There have been a lot of strange things about the pandemic. Baking bread becoming hip, the on and off shortage of toilet paper, and the need to tell people not to drink bleach to fight Corona Virus were all things I did not think would happen in 2020. But, for value investors, perhaps the strangest thing about the pandemic has been the lack of activity from Warren Buffett and Berkshire Hathaway.

The pandemic seems custom made for Buffett to act. Berkshire entered the pandemic with an absolutely pristine balance sheet anchored by $137B in cash. Entire industries were up ended by the pandemic. The combination of a pristine balance sheet in the hands of the world’s best investor plus industry upheaval would normally create an ideal operating environment for Buffett to cut some fantastic deals.

Instead, we’ve seen Buffett seemingly bunker up. He’s been mostly a seller of stocks; in April, he sold out of his airline stocks (a move I liked at the time), and he’s recently been selling a variety of other positions, including Liberty Global, Axalta (which he’d held since 201, and (somewhat shockingly) JPMorgan and Wells Fargo (he also sold some smaller positions like Visa, Mastercard, SiriusXM, Goldman, and others).

To be fair, Buffett has put some money to work this year. In May and June, Berkshire bought back $5.1B of stock, by far the largest repurchase they’ve ever done. He bought Dominion’s gas pipelines for almost $10B (his largest deal in almost four years). He bought ~$6B worth of five Japanese trading companies. In the U.S. public markets, Berkshire bought some Barrick Gold stock, and, most recently, Berkshire has more than doubled their money by buying ~$750m of the hottest IPO of the year, Snowflake. However, the Barrick and Snowflake deals were almost certainly done by his lieutenants (Todd and Ted), not Buffett, so I think you could easily argue that, in the domestic public markets (the ones Buffett claims to be most bullish on), the only thing Buffett has done in the pandemic is sell a bunch of stocks and used the proceeds to buy back his own shares.

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When you look at the whole picture, it’s tough to reconcile the Buffett we’re seeing today with the “buy when there’s blood in the streets” Buffett of yesteryear. Buffett waited till May to turn the repurchase machine on, entirely missing the depths of the March/April panic. In fact, during the panic, Buffett was a net seller, as his only move of note was dumping the airlines at the almost the exact bottom. And, while the recent repurchases and Japanese investment / pipeline deal are great, there are not real needle movers for a company Berkshire’s size; they’re more nice incremental moves. In addition, the Snowflake and Gold moves are perplexing. Again, those moves probably largely driven by Todd and Ted, but they do seem a little antithetical to Buffett. Buffett has largely been outspoken that gold will underperform “America” and that he’d never bought into an IPO. For the only public investments Berkshire makes during a crisis to be made by his two lieutenants and to be into areas Berkshire has traditionally avoided is perplexing, to say the least. Overall, it makes me wonder if Buffett is a lot more bearish on the markets and America than his public facing front.

Perhaps Buffett being bearish shouldn’t be a surprise. Between his ownership of BNSF (railroads), Berkshire Hathaway Energy (public utilities), and the insurance companies (GEICO and a bunch of others), you could argue that Buffett has better real time information on the economy than anyone not inside the federal reserve. While Buffett is famously long term thinking, it’d be hard to fault him if the data he saw in March/April and even through today paralyzed him into inaction. The economic data during the pandemic has been orders of magnitudes worse than the data during the financial crisis; I would bet it’s hard to get real time data that shows the economy is free falling into a depression and get excited about putting any money to work in equities.

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Of all Berkshire’s moves, the most surprising to me is his sale of Wells Fargo. Berkshire’s held Wells Fargo for ~30 years, and his investment in Wells has been compared to a love affair. For years, Wells Fargo served as the barometer for new investments at Berkshire: any potential purchase had to be compared to the opportunity cost of just buying more Wells Fargo. Yes, Wells Fargo is undergoing some issues currently, but it trades for ~10x P/E and below book value. A bank with Wells Fargo’s storied history and scale trading for a discount to book value seems like exactly the type of investment Buffett would be eager to make. For him to turn around and sell the bank at multi year lows is pretty shocking.

Critics might say that the current scandal / mismanagement at Wells Fargo is what caused Buffett to sell, not any overall bearishness on the market. While I’m not sure if the later is true (in fact, as recently as 2018 he was saying Wells would do well despite the scandal), I’m pretty sure the former is wrong: Buffett didn’t just sell Wells Fargo; he sold JPM and Goldman too. Yes, he bought some more BoA, but overall Buffett seems to be reducing exposure to the financial sector. Remember, Buffett has historically been something of a financials specialist, particularly in times of distress. Whether it was buying Amex after the salad oil scandal (as detailed in Snowball), investing Wells Fargo in the savings and loans crisis of the 90s, or being the lender of last resort for banks during the financial crisis, Buffett has made fortunes taking a long term view and putting money to work into financials in times of distress. For him to sell off a huge chunk of his exposure during the pandemic certainly says something. I think it speaks to an underlying bearishness which, again, isn’t completely surprising given the economic data Buffett is probably getting.

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So what does all this mean for Berkshire? For years, value investors have hoped that Buffett would live long enough to strike one last great deal during a crisis. I think the chances of that have passed. With hindsight, I think 2020 will mark the year Berkshire went fully “post-Buffett” for the first time. A good crisis went to waste, and the company spent most of its time and energy returning capital to shareholders (through repurchases) and letting the new blood invest into areas Buffett and Berkshire had previously scorned.

That’s not to say this is a bad thing. Clearly, there’s money to be made in the new sectors (Berkshire would be ~$1B poorer if it hadn’t invested in the Snowflake IPO!). But, for investors like me who grew up reading Buffett’s letters and watching him take advantage of crises to create fortunes, it’s certainly a little sad.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.