Value Investors: Waiting for the Fat Pitch

Welcome to Episode #451 of the Value Investor Podcast.

Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.

On Aug 10, 2026, Michael Burry, responded to a tweet on X about Berkshire Hathaway’s BRK.B second quarter 2026 earnings.

He tweeted, “My biggest fear for Berkshire Hathaway was that when Warren finally stepped down, the successor would be too old and otherwise not Warren, so would not have his patience for the fat pitch.”

What Did Burry Mean About the Fat Pitch?  

The “fat pitch” is a baseball term describing a pitch that is thrown right down the middle of the plate and which the batter can hit hard.

Warren Buffett mentioned one of the greatest baseball hitters of all time, Ted Williams, and his book, The Science of Hitting, in his 1997 annual letter. In it, he describes that Williams would only swing at balls in his best cell, which were the ones with the highest odds of getting a hit.

The “fat pitch” would be one in the best cell.

This term has been co-opted to investing with investors and traders saying they were waiting for the “fat pitch” which would increase their odds of a successful trade or investment.

Buffett has been known to have incredible patience which results in him waiting for the “fat pitch.”

Burry concluded the Aug 10, 2026, tweet by saying “I believe this fear has come true. I do not find Berkshire an attractive investment going forward.”

Berkshire Hathaway Cash Hoard Fell in Q2

Is Berkshire abandoning waiting for the “fat pitch”?

For the first time in four years, Berkshire Hathaway’s cash hoard fell in the second quarter of 2026.

It fell 4% to $364.7 billion as the company bought homebuilder Taylor Morrison for $6.8 billion and bought another $10 billion of Alphabet in a private placement.

Is Alphabet a Value Stock?

Some value investors saw the buying of more shares of Alphabet Inc. (GOOGL), a position apparently initiated by Warren Buffett himself, as a sign that they are not willing to wait for deals.

Alphabet trades with a forward P/E of 16.9, which isn’t that expensive. As the shares have fallen from their highs this year, the PEG ratio, which is the price-to-earnings (P/E) divided by the growth rate, is just 1.0. A PEG of 1.0 or under usually indicates a company has both value and growth.

It seems cheap based on these two metrics.

But Alphabet has a price-to-sales (P/S) ratio of 9.5. A P/S ratio over 10.0 for a technology company is usually considered to be stretched. Tech companies traded with P/S ratios over 10 at the top of the dot-com bubble.  

On Aug 14, 2026, Berkshire Hathaway’s 13-F filing indicated that Berkshire had purchased about $6 billion more shares on the open market in the quarter. Alphabet is now the third largest equity position in the Berkshire portfolio.

Is Berkshire abandoning the fat pitch philosophy under new CEO Greg Abel?

What Else Should You Know about Berkshire Hathaway and the Fat Pitch?

Tune into this week’s podcast to find out.

[In full disclosure, Tracey owns shares of GOOGL in her personal portfolio.]

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This article originally published on Zacks Investment Research (zacks.com).

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