The company of the famous 93-year-old investor, who has repeatedly become a trendsetter on the stock exchanges over the decades, announced that it had sold off half of its massive stockholding in the IT giant during the second quarter. According to this, Apple shares worth $75.5 billion (€69 billion) were sold in the last three months. As a result, Berkshire’s cash reserves rose to a record value of €277 billion.
Most recently, Berkshire also “methodically reduced” its investment in Bank of America, the “Wall Street Journal” reported on Sunday. After Apple, Bank of America is the second most important company in Berkshire Hathaway’s portfolio.
This has further increased the mountain of cash that Buffett is sitting on. As early as May, Buffett pointed to the current challenges of finding good and profitable investments. “We would like to invest, but we are not going to spend the money as long as we are not convinced that it is something with low risk and high return,” said Buffett.
One of Berkshire’s “Giants”
Just two years ago, Buffett referred to Apple stock as one of the four “giants” in his conglomerate of investments. There was speculation that Buffett could hold onto Apple shares indefinitely, just as he has done with those of Coca-Cola and American Express for decades. As recently as this May, Buffett described Apple as an “even better business” than American Express and Coca-Cola.
Buffett’s sale of Apple shares “could alarm the markets,” said Jim Shanahan from the investment advisory firm Edward Jones. This is especially true in light of recently weak results from tech companies, poor labor market figures, and uncertainty regarding future interest rate developments.
Buffett has repeatedly praised Apple CEO Tim Cook in high terms. Cook was also a guest at the annual general meeting in Omaha in May.
Still the Largest Stake
Even after the sale of the massive Apple stake, Apple remains the number one investment in Berkshire’s portfolio – and is about twice as large as the Bank of America stake. Shanahan estimates that Berkshire still holds more than 400 million Apple shares.
Cathy Seifert from the research firm CFRA stated to Reuters that the sale was a sensible hedge, as Apple has an outsized weight in Berkshire’s investments. However, it could also be a preparation for a possible downturn in IT stocks. Berkshire is “gearing up for a weaker economy,” Seifert said.
No Thoughts of Resignation Yet
The 93-year-old Buffett also revealed his preferences for a succession solution at the meeting in a packed sports and entertainment arena. If it were up to him, he would leave the final say in investment decisions to his designated successor, Greg Abel, Buffett said. Ultimately, however, the board of directors at Berkshire will decide on the succession plan.
Buffett had previously introduced Abel, who currently heads Berkshire’s energy business, as his successor in the CEO position back in 2021. However, he is currently not thinking about stepping down.
In addition to its investments, Berkshire Hathaway fully owns the insurer Geico, the railway company BNSF, and the battery manufacturer Duracell. The holding company is also active in the insurance industry.