Based on this fair value information, I believe Buffett pared down his stake in another top holding and completely exited one of Berkshire’s smaller value plays. Traditionally, these “clues” come in the form of a 13F filing with the Securities and Exchange Commission (SEC). A 13F is a quarterly filing that provides an under-the-hood look at what Wall Street’s smartest (and richest) money managers have purchased and sold.

Two stocks Buffett is likely selling that Wall Street doesn’t know about yet

The Motley Fool has positions in and recommends Apple, Bank of America, Berkshire Hathaway, and Chevron. Buffett has sold more equities than he’s purchased for seven consecutive quarters, with $131.6 billion in aggregate net-equity sales since Oct. 1, 2022. Based on these various clues, which I’ll touch on in more detail in a moment, I’d opine that Buffett is selling two additional holdings that Wall Street and investors don’t yet know about. Few investors command Wall Street’s attention quite like Berkshire Hathaway (BRK.A 0.99%) (BRK.B 1.03%) CEO Warren Buffett. Since taking the reins in 1965, the appropriately named “Oracle of Omaha” has nearly doubled up the annualized total return of the benchmark S&P 500. On an aggregate basis, Buffett has overseen a gain of 5,174,441% in Berkshire’s Class A shares (BRK.A), as of the closing bell on August 7.

• While we strive to provide a wide range of offers, Bankrate does not include information about every financial or credit product or service.
• Given the sizable unrealized investment gains in Apple Berkshire’s investment team is sitting on, Buffett believed that locking in some gains now, at a lower tax rate, would be, in hindsight, viewed favorably by the investing community.
• This book compiles the full, un-edited versions of 50 years of Warren Buffett’s letters to the shareholders of Berkshire Hathaway.
• Instead, if you’re really serious about learning insights into Warren Buffett’s way of investing and business management, do what other serious investors do and read the full, unabridged letters.

Buffett Takes Aim At Stock Buybacks

Thus, locking in some profits at a historically lower corporate tax rate would, in hindsight, be viewed favorably by his company’s shareholders. Lastly, with Buffett referring to Occidental Petroleum as an “indefinite” holding in his most recent annual letter to shareholders, there may not be a need to have so much capital tied up in Chevron. After all, energy stocks have rarely played a key role in Berkshire’s Hathaway’s investment portfolio. As Berkshire’s position in Occidental grows, it wouldn’t be surprising to see a corresponding reduction in its stake in Chevron. It’s not the first time that Buffett has ended the year without making a major purchase, and he often expresses his disappointment in his annual letters.

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By selling Berkshire’s largest position, Buffett is reducing the impact it will have on Berkshire’s value going forward. If Berkshire hadn’t sold any of its Apple shares, the stake would have been worth nearly $200 billion at the end of June, compared to Berkshire’s market cap of about $890 billion. Even if Buffett still likes Apple’s business, a stake that large would have an outsized impact on Berkshire over time. Furthermore, Form 4 filings tell us that Buffett and his team have been actively selling shares of No. 2 holding, Bank of America (BAC 0.62%). Shareholders with a 10% or greater stake in a company are required to file Form 4 anytime shares are bought or sold. As a caveat, GAAP net income dropped 16% to $30.3 billion during the quarter.

Comparatively, Buffett and his top aides oversaw the sale of $77.151 billion of equity securities. The lion’s share of this selling activity is tied to Berkshire’s largest position, Apple (AAPL 0.05%). The $84.2 billion fair value estimate for Berkshire’s stake in Apple, as of June 30, implies that nearly half of the company’s holdings in the tech stalwart were disposed of during the second quarter. This follows the sale of more than 116 million shares of Apple in the first three months of 2024. Apple reported lackluster financial results in the June quarter, despite beating expectations on the top and bottom lines. Revenue increased 4.8% to $85.8 billion and GAAP net income rose 7.6% to $21.4 billion.

Buffett clearly doesn’t mind paying taxes on gains at today’s low rates when they could be higher down the road. Individual investors can also benefit from periodic portfolio rebalancing. While you may not have an individual stock that has grown as much as Apple, there may be funds you hold that account for a larger portion of your portfolio than you originally intended. Reducing those holdings and adding to positions that have lagged can be an effective way to manage risk in your portfolio. If history has taught us anything, it’s that Warren Buffett will deploy Berkshire Hathaway’s cash hoard when wonderful businesses are trading at fair prices. Although it could be some time before we see this capital put to work, Buffett’s long-term faith in the American economy and stock market remains unwavering.

This is sure to keep dinging the stock, but Apple bulls should hold fast. The company continues to be robustly profitable and is sure to remain so. It also has avenues for growth, particularly in the area of services revenue. I’m an Apple shareholder myself, and I’m hanging on to my shares no matter what Warren does. The stock’s bulls should grit their teeth and hold fast, in my opinion. While he mentioned that repurchases by Apple (AAPL) and American Express (AXP) were beneficial to Berkshire, pricing of that buyback is key.

In 1965, Buffett sent a letter to what was then the Buffett Investment fund which held Berkshire Hathaway as one of a series of positions. I suppose if the author was another notable investor the curation might be useful, but that wasn’t the case. I’m actually a little surprised that even Buffett granted permission for this book to be published, although he did stipulate a condition that 20% of print and eBook sales (not just profits!) will be donated to a charity that he supports (Glide.org). I was offered a review copy of a book called Gems from Warren Buffett which is basically selected snippets from Warren Buffett’s Letter to Shareholders of Berkshire Hathaway. I read it and it was entertaining, but there was no real original material other than the contribution of organizing the quoted portions into themes like “Managing With Style” or “Market Forces”.

Enter your mobile number or email address below and we’ll send you a link to download the free Kindle App. Then you can start reading Kindle books on your smartphone, tablet, or computer – no Kindle device required. As a matter of fact, I believe that we have done somewhat better during the past few years https://forexarena.net/ with the capital we have had in the Partnership than we would have done if we had been working with a substantially smaller amount. This was due to the partly fortuitous development of several investments that were just the right size for us — big enough to be significant and small enough to handle.

Thanks to the company’s quarterly operating results, annual shareholder meeting, and Form 4 filings with the SEC, we already know about three big moves that have been made. No matter how good a business is, its price can get to a level where investors berkshire hathaway letters to shareholders aren’t able to earn an attractive return over the long term. When Berkshire first bought Apple in 2016 it sold for about 10 times its annual earnings per share. Over time, that price-earnings ratio has expanded and is now around 30.

Nevertheless, Buffett isn’t oblivious to the possibility of a big sell-off in the stock market. Equities are historically pricey, and the potential for energy commodities to take it on the chin if the U.S. economy falls into a recession is palpable. Berkshire collected dividends during that time, but the high multiple of the late ‘90s acted as an anchor on the stock for more than a decade. Buffett seems determined to avoid the same mistake with Berkshire’s Apple shares.

The company’s performance has been mildly disappointing in recent quarters, after all, and its anchor product, still the iPhone, is soon to be 20 years old. One important aspect is that Apple isn’t the only stock Berkshire has exited from recently. As July morphed into August, the company sold over $3.8 billion worth of Bank of America stock. This has whittled Berkshire’s position in the bank down to slightly over 942 million shares, giving it a stake of around 12% in the lender’s equity.