Warren Buffett’s Berkshire Hathaway has made some big moves recently. The company sold a lot of its Apple and Bank of America stock. It also stopped buying back its own shares.
At the end of September, Berkshire had a record $325 billion in cash. This is up from $272 billion at the end of June. The company sold $36 billion worth of stocks in the third quarter alone.
Buffett has been selling Apple shares for four quarters in a row now. Since the end of 2023, Berkshire has sold about 70% of its Apple holdings. It now owns around $70 billion worth of Apple stock.
Berkshire also sold about $10 billion of Bank of America stock since mid-July. For the first time since 2018, the company didn’t buy back any of its own stock last quarter. So why is Buffett selling so much?
Berkshire’s shifting investment strategy
He has given a couple reasons. First, he thinks stocks are overpriced right now.
Second, he expects capital gains taxes to go up. Buffett wants to sell and realize profits before that happens. Some investors are worried about Buffett’s moves.
They think he might be predicting a big drop in the stock market. Others think Berkshire could be raising cash to make a large acquisition. Buffett is 94 years old now.
Another possibility is that he is preparing to step back from actively managing Berkshire’s investments. This would allow his successors to reshape the company’s portfolio. In the end, it’s hard to know exactly what Buffett’s moves mean.
As one analyst put it, “We wouldn’t read too much into Buffett’s latest moves since there is more than one logical explanation for his actions.” Copying Buffett’s buys and sells doesn’t guarantee success for other investors.
