Buffett's Team Bought The Parade. We Bought A Float.
Berkshire Hathaway (BRK.B) quietly disclosed a stake in Macy's (M) — a department store the market left for dead, trading for less than its buildings are worth. It's the most Graham-and-Dodd trade in this week's paper, and we followed it with a starter position.
Based on WSJ reporting (Jinjoo Lee, Heard on the Street) · Capital Wealth analysis by Sean Anees Saifi · June 5, 2026
When the real estate is worth more than the market cap, you're buying the business for free.
The Math That Caught Omaha's Eye
Strip away the perfume counters and here's what Berkshire saw: Macy's (M) trades at roughly 1.3 times book value and 11 times forward earnings, pays a 3.2% dividend, and owns real estate — including the Herald Square flagship — that analysts appraise at $7.9 to $10.5 billion. The entire company's market value: about $5.7 billion. You are buying the buildings at a discount and receiving an operating retailer, free. This is the oldest play in the value-investing hymnal: pay less than the assets, let the business be the upside.
And the business has stopped being a melting ice cube. Four straight quarters of positive comparable sales. Bloomingdale's comps up 10% two quarters running. Store staffing up 14% per location under CEO Tony Spring — an actual bet on service. Meanwhile rival Saks is closing nearly a third of its Saks Fifth Avenue and Neiman Marcus stores, handing share to the survivor. Berkshire, for what it's worth, also owns 8% of Kroger (KR) — Omaha is methodically buying the unglamorous American consumer.
Why It Fits This Exact Week
Thursday's record Dow was led by health care and financials, not chips — the rotation into cheap, cash-generating, dividend-paying businesses we've been positioning for all spring. A department store at 11 times earnings with a real-estate floor under it is the purest expression of that rotation. It will never trend on social media. That's roughly the point.
The risks, stated plainly: department-store retail is still a secularly shrinking category, a consumer recession would hit comps, and the real-estate value is only realized if management monetizes it (or someone makes them). That's why this is a starter position with the dividend paying us to wait — not a conviction overweight.
What This Means For The Book
We added Macy's (M) at a starter ~1% in the income-tilted tiers — asset-backed, 3.2% yield, four quarters of improving comps, with Berkshire (BRK.B) as the largest co-sign in finance. We continue to hold Berkshire across all tiers as the book's quality-and-cash anchor. Graham's rule, week 400-something in a row: price paid determines return.
Tickers Mentioned In This Article
MMacy's
BRK.BBerkshire Hathaway
KRKroger
KSSKohl's (17 straight comp declines — the contrast)
