Why did 93 year old Warren Buffett sell half of Berkshire’s Apple stake in Q2 2024?!
Throughout the first and second quarters of 2024, Berkshire has been busy liquidating a majority of their AAPL shares to the tune of 515.5 million shares and now they only own 400 million shares of AAPL as of Q2 2024.
It is shocking to me that Berkshire Hathaway would sell a total of 56.3% of their original AAPL holdings to capture some capital gains at more favorable corporate tax rates.
This is especially perplexing to learn given during the Berkshire meeting in May 2024, Buffett said Berkshire would continue to own a lot of Apple and it would likely be Berkshire’s biggest holding.
While AAPL is still Berkshire’s biggest holding, it cannot be that reassuring for Berkshire/Buffett to be selling off not only Apple, but also now Bank of America, according to the Wall Street Journal.
Who will be more right on Apple’s valuation, Tim Cook or Warren Buffett? Because while Berkshire was reducing, Apple has been buying $110 billion of their shares back that was announced during the May 2024 earnings call.
Apple’s share repurchases have totally offset Berkshire’s massive selling as AAPL is trading in the $220+/share price range in late August 2024.
Berkshire would rather have $277 billion in cash and equivalents (US treasury bonds) as of August 2024. Is Buffett waiting for a stock market buying opportunity or waiting to buy whole companies? Is Buffett gearing up for a recession or stock market crash?
Time will tell which CEOs are making the better capital allocation decisions presently. What would the late Charlie Munger tell Buffett to do with all that cash?!
It’s incredible how on August 28, Berkshire Hathaway seems to have hit a $1 trillion market cap! This could be an early birthday present to Buffett! But with Berkshire gaining 28% YTD, how much higher can it go?!
When I recorded this video before the $1T market cap, I estimated the parts of the Berkshire business to add up to its August 27, 2024 $987B market cap:
$430B value of Berkshire-owned companies (43.5%)
$277B cash and equivalents (28.1%)
$280B stock portfolio (28.4%)
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Happy Birthday to Warren Buffett on August 30!!! 🥳
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