Warren Buffett’s Berkshire Hathaway has been selling Apple stock and building up its cash reserves. The company’s cash pile has reached a record high of $325.2 billion. Buffett started reducing Berkshire’s stake in Apple late last year.
By the end of the second quarter, the company had cut its Apple shares from 400 million to 300 million. The selling continued in the third quarter. Apple is still Berkshire’s largest holding, valued at $69.9 billion.
At one point, Apple made up $178 billion of the company’s portfolio. Buffett has been scaling back his investments in stocks overall for the past two years. In the third quarter, Berkshire only bought $1.5 billion in stocks.
It has been a net seller of stocks for eight quarters in a row. The shift has led to Berkshire’s cash and short-term treasuries being worth more than its stocks.
Berkshire builds cash amid market shifts
The stocks were valued at $271.6 billion at the end of the third quarter. Some investors have questioned the move. But Berkshire’s stock has done well over the last three years, rising 52% compared to the S&P 500’s 22% increase.
Buffett thinks capital-gains taxes will go up to help with the federal deficit. “I would say with present fiscal policies I think that something has to give and I think that higher taxes are quite likely,” he said at Berkshire’s annual meeting in May. Vice President Kamala Harris has proposed raising the corporate tax rate from 21% to 28% if she becomes president.
Former President Donald Trump has suggested cutting the rate. Buffett said Apple will remain Berkshire’s biggest investment. But he likes having cash in the current market.
“But I don’t mind at all, under current conditions, building the cash position,” he noted. Buffett expects a higher capital-gains tax but is not worried. “We always hope at Berkshire to pay substantial federal income taxes, we think it’s appropriate,” he said.
