Berkshire Hathaway's Silver Bet: How Buffett's Early Exit Cost Billions
Global investment giant Berkshire Hathaway once made a significant foray into the silver market, a move that showcased former CEO Warren Buffett's sharp investment instincts but also highlighted a recurring pattern of premature exits. According to a report by Andrew Bary with inputs from Barrons, this silver investment, though profitable at the time, now represents a missed opportunity worth billions.
The Silver King's Brief Reign
In 1997 and 1998, Berkshire Hathaway, under the leadership of Chairman Warren Buffett, accumulated a massive position in silver when the metal was trading around $5 an ounce. The company purchased 129.7 million ounces over a six-month period, which amounted to approximately 25% of the annual mined supply at the time. This substantial holding attracted considerable attention in the silver market and even raised regulatory concerns, as some feared Buffett might be attempting to replicate the Hunt brothers' strategy from the 1970s.
However, Berkshire sold out of this position within a decade, realizing an unspecified profit. Fast forward to 2026, and that decision looks costly. With silver prices tripling over the past year and reaching $100 an ounce, the same holding would now be valued at about $13 billion. Silver has surged by 40% so far in 2026 alone, driven by strong demand and supply deficits.
Buffett's Long-Term Silver Insight
Warren Buffett is no stranger to the silver market. His interest dates back to the early 1960s, when the U.S. government effectively set the price at around $1.29 an ounce. At that time, certain coins like dimes, quarters, and half dollars minted before 1965 contained 90% silver, with about 0.18 ounce in a quarter. Buffett recognized that the government was artificially suppressing the price despite strong industrial demand, and he was proven right when silver was demonetized in 1965 and prices rose.
This deep understanding informed Berkshire's 1990s investment. In a 1998 press release, the company explained that bullion inventories had fallen significantly due to user demand exceeding mine production and reclamation. Buffett and Vice Chairman Charlie Munger concluded that equilibrium would only be established at a higher price, a rationale that mirrors the current bull case for silver. The Silver Institute estimates a 2025 supply deficit of over 100 million ounces, similar to the 150 million ounce deficit in 1997.
A Pattern of Premature Sales
The silver investment is just one example of Buffett making a smart call but selling too soon. At the 2006 Berkshire annual meeting, Buffett humorously remarked, "I bought it very early. I sold it very early. Other than that, everything I did was perfect." He added, "I was the silver king there for a while. We did make a few dollars on it. But we’re not good at the game of, when it gets into the speculative area, figuring out how far a speculative boom will go."
This pattern extends to other investments. Berkshire sold most of its stake in Apple in 2024 and 2025, as well as a group of bank stocks in 2020 and 2021, all at prices below current levels. These moves underscore Buffett's disciplined approach, which sometimes leads to early exits despite long-term potential.
The Legacy of Buffett's Investment Philosophy
Charlie Munger once marveled at Buffett's investment breadth, insight, and patience, noting at the 1998 annual meeting, "Think of the discipline it takes to think about something for three or four decades, waiting for a chance to employ 2% of your assets." The silver holding, valued at less than $1 billion then, exemplifies this patience and encyclopedic knowledge accumulated over a lifetime of investing since the early 1940s.
In 1997, Berkshire's diverse portfolio included physical oil, silver, and zero-coupon Treasury bonds, showcasing Buffett's ability to spot opportunities across asset classes. Even before acquiring insurer Alleghany in 2022, Buffett had studied decades of its annual reports, highlighting his meticulous research habits.
Today, as silver continues its bull run, Buffett's early exit serves as a reminder of the challenges in timing speculative markets. While Berkshire profited from the sale, the missed billions underscore the fine line between prudent profit-taking and premature divestment in volatile commodities.
