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What's the next great investment idea? And what are the chances that Warren Buffett will be the one to identify it? Wall Street likes his chances. Berkshire Hathaway's Class B shares are up 25 percent so far in 2024. And the rally comes as Buffett quickly pared back his blockbuster gain in Apple shares.

On Saturday, Berkshire Hathaway announced its third-quarter results, notably that its cash and securities holdings had grown to $325 billion. Much of that came from Apple stock sales, which are now valued at $70 billion for Berkshire, down from a high of $178 billion. Berkshire first invested in Apple in 2016, when the stock price was around $25 per share. Today Apple is trading above $200.

Berkshire's total book value in the third quarter was $631 billion, while the capitalization of the public stock market is just under $1 trillion. This premium to net asset value reflects shareholders' vote of confidence that Buffett, at 94 years old, has yet another similar feat.

Currently, however, Buffett is increasingly content to cut U.S. Treasury coupons and earn a few percentage points, without risk, without dividends or real buybacks for Berkshire shareholders.

This comes at a time when other major pools of capital – alternative asset managers and BlackRock – are pouring money into all kinds of simple and exotic private loans, as well as long-running infrastructure and data center deals. Blackstone, for example, invested $123 billion in the last 12 months, mostly from public or even private equity.

Of course, Berkshire's property and casualty insurance business conducts all sorts of sophisticated trading and hedging activities. However, the investment group is best known for buying largely listed, large-cap stocks as well as large business platforms such as utilities and railroads. Since there is no crisis in the financial markets in which Buffett could play the white knight to receive a handsome reward, when markets are calm, the question arises whether he has to opt for less simple securities.

Berkshire's sheer size now makes it difficult to find individual investments that can make a difference. Its securities portfolio of more than $300 billion includes fewer than 30 stocks, and the next Apple will likely have to be an emerging Big Tech luminary. Buffett's Apple bonanza helped obscure Berkshire's lack of lucrative opportunities. This dilemma is now back on the table.

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