When asked about Berkshire’s merger with Bank of America, disposing of it, claimed that the company’s rising cash deposits only reflect its inability to find deals in the current weak and valuable economic environment. Not only did Warren Buffett take out Bank of America, but he quietly took down his most iconic company: Apple.
Berkshire sold a net worth of $75.5 billion of shares in the second quarter (ended June 30), most of which we now know came from Buffett’s liquidation of half of his Apple shares. The company provided a snapshot of its major holdings, showing that it only owned $84.2 billion of Apple stock on June 30, a sharp drop from $135.4 billion on March 31 and $174.3 billion on December 31, 2023.
The rest of Berkshire’s top holdings were left untouched
The rest of Berkshire’s top 5 offerings (Bank of America, American Express, Coca Cola and Chevron) remained untouched in Q2. This means that Buffett clearly decided it was time Apple To go. We have since learned that after the end of the second quarter, Buffett also began dumping a large chunk of his stock into Bank of America, where he is the largest shareholder.
Berkshire’s cash position swelled to more than $88 billion – with revenue from the sale of Apple making up the bulk of the new cash – but the company generated significant cash from its own operations, and in the second quarter Berkshire reported an operating profit of $11.6 billion, up from $10 billion in the same period a year ago.
Berkshire’s money mountain has been growing for years
Berkshire has struggled for years to find ways to use its cash pile in a sluggish deal environment and laments a lack of low-cost opportunities. At the company’s annual shareholder meeting in May, Buffett said he was unwilling to spend money “unless we think we’re doing something that’s low risk and will make us a lot of money.” ” It now appears that not only was Buffett in no rush to spend money, but, by taking advantage of the AI bubble, he aggressively liquidated his largest position.
Perhaps most surprising is when and how Buffett unloaded half of his Apple position: Berkshire managed to offload $84 billion, or about 390 million shares, of Apple at a time when stock value quickly, and especially after the liquidation. up after the Worldwide Developers Conference (WWDC24).
Was Buffett’s move related to Apple’s strange performance?
You may also be wondering if Buffettthe decision had nothing to do with Apple’s strange performance after the WWDC24 conference.
As a reminder, the knee-jerk reaction to Tim Cook’s “groundbreaking” announcement of chatGPT Siri was a huge flop, with the stock being dumped on the day of WWDC24.
Key Takeaways
• Berkshire sold half of its Apple shares
• Buffett’s move reflects his skepticism about the AI bubble
• The rest of Buffett’s biggest positions remain untouched, except for the sale of Bank of America
• Buffett’s money mountain grows as he waits for good opportunities
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2024-08-04 19:26:31
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