Warren Buffett’s Berkshire Hathaway has sold $133 billion worth of stocks in the first three quarters of 2024. This includes a reduction in its stake in Bank of America, which has been a major investment for Berkshire in recent years. At the end of Q3, Berkshire Hathaway’s top four holdings were Apple at $69.9 billion, American Express at $41.1 billion, Bank of America at $31.7 billion, and Coca-Cola at $28.7 billion.
Buffett mentioned at Berkshire Hathaway’s 2024 shareholders’ meeting that he found it “quite attractive” to build a larger cash position with the stock market continuing to rise. Valuations have become more expensive, limiting the pool of quality businesses selling at reasonable prices. Notably, Buffett has not sold a single share of Coca-Cola or American Express in over 25 years.
Coca-Cola is one of Berkshire’s longest-held investments, originally bought in the late 1980s. Despite shifting consumer preferences, Coca-Cola has continued to drive growth across a large lineup of beverages. The company has paid a growing dividend for 62 consecutive years.
Berkshire Hathaway has held shares of American Express for 30 years. Buffett favors the company for its strong brand power and spend-centric business model.
Berkshire trims Apple, boosts cash reserves
American Express has delivered solid financial results, with third-quarter revenue reaching a new record and growing 8% year over year. In the third quarter of 2024, Berkshire Hathaway reduced its stake in Apple by 25%, or 100 million shares, leaving it with 300 million shares. The company also sold some shares of Bank of America.
Buffett is known for his buy-and-hold investment approach, often holding onto stocks for many years or even decades. Despite recent rapid turnover, Buffett continues to focus on finding and purchasing quality stocks at fair prices and holding them for the long term. However, Buffett and his team at Berkshire have been unloading their Apple position, selling Apple stock every quarter since Q4 2023.
When Berkshire first purchased Apple stock in 2016, it traded around a price-to-earnings ratio of 10.6. Now, it trades for 39 times trailing earnings, eliminating the value proposition of Apple stock. At Berkshire Hathaway’s annual shareholder meeting in 2024, Buffett talked about taking gains while the federal tax rate was at historically low levels. With Donald Trump winning the presidential election, an increase is almost certainly off the table for the next four years.
Investors might consider reassessing their positions in Apple, as its price tag has become more expensive and lacks the business performance to back up that valuation. Whether investors should follow Buffett’s lead in selling Apple stock will depend on individual investment philosophies and market outlooks.
