Buffett’s $5 Billion Mystery Bet: Should You Chase It—or Play It Smart?

When Berkshire Hathaway’s 13F filing hits after today’s market close, the investing world will finally learn the identity of Warren Buffett’s secret $5 billion purchase. Speculation is running wild.

MarketWatch recently ran a bold prediction: there’s a 70% chance Buffett bought Caterpillar (CAT), 10% each for Deere (DE), Honeywell (HON), and UPS—four giants from the industrial sector.

While I agree the odds are stacked toward an industrial pick, pinpointing the exact stock is tricky. There are plenty of attractively valued names in the space right now. And here’s the danger: if you buy one of these stocks just because you think it might be Buffett’s pick, you’re essentially joining a speculative herd. If it turns out Buffett bought something else, short-term traders who piled in could quickly dump their shares—sending the stock price down and leaving you holding the bag.

But the article did contain one piece of advice worth noting: instead of betting on a single name, consider an industrial sector ETF like XLI.

Why? Not because you’re wagering on Buffett’s specific choice, but because the industrial sector as a whole could be entering a strong cycle. With both U.S. and foreign companies ramping up plans to invest and build facilities in America, the entire industrial space stands to benefit.

In other words, forget trying to guess Buffett’s hand—focus on positioning yourself for the bigger macro trend.