Interesting move by Warren Buffett: stock market guru sells half of Apple shares

This may be the most surprising move in Warren Buffett’s long career: After years of trying to stay away from technology stocks, except for a few high-profile failures, such as an investment in IBM, the legendary American investor started in 2016. . to buy Apple shares with his company Berkshire Hathaway.

Three years earlier, Charlie Munger, now dead, Buffett’s right-hand man, had spoken to the news agency. Reuters he said that few other companies are a better fit for Berkshire than Apple. But after an initial investment of about $1 billion, the Omaha conglomerate significantly increased its interest in the iPhone maker over the years. In the following years, Berkshire Hathaway bought back about $36 billion in Apple shares.

It was a gold rush: at the end of last year they were worth almost $175 billion – good for more than half of Buffett’s portfolio. In a career that has spanned nearly seven decades, no stock investment has ever produced greater returns for the now 93-year-old Buffett. “We should have bought more,” Munger told the newspaper years later The Wall Street Journal. At Berkshire Hathaway’s annual meeting in early May, Buffett praised the technology company: “The iPhone is probably the greatest product of all time,” he said.

But by then, Berkshire Hathaway had sold about 13 percent of its stake in Apple. And last weekend, the conglomerate announced that it has reduced its interest in recent months and has sold about half of its Apple shares (worth more than $ 50 billion). At the end of the second quarter, Berkshire’s stake in Apple was still worth $84.2 billion.

Has Buffett Lost His Faith in Apple? There is no way, the technology company from Cupertino, California, is the largest investment in Berkshire Hathaway, which is still sitting on 400 million shares of Apple. But according to analysts, it shows how the “Oracle of Omaha”, as one of his nicknames, is increasingly worried about the stock market and the American economy. Partly due to the sale of Apple shares, Buffett saw his wealth grow by 88 billion in the last quarter, to a record $277 billion. Buffett wants to put those billionaires to work, he said at Berkshire’s annual meeting in May. But he also immediately admitted that he did not see many opportunities in the current stock market that involved “a little risk” and could provide a lot of return at the same time.

At that time, the stock markets were still driven by American technology stocks in particular, riding a wave that inspired the publication of ChatGPT and the rise of generational AI. But investor faith in AI (and its potential returns) has cooled significantly in the past three weeks, and there is now a real wave of selling not only across exchanges Tech Nasdaq. The fact that one of the world’s most prestigious investors is becoming increasingly defensive will not change that sentiment immediately.

In ‘The Big Market’ The economics editors delve every day into a surprising trend in the world of economics.