Renowned investor Warren Buffett, known for his long-term stock picks and strategic patience, is on a selling spree.
Over the last couple of months, his company, Berkshire Hathaway (NYSE: BRK.A), has unloaded a significant chunk of Bank of America (NYSE: BAC) stock. And it wasn’t just a small adjustment.
Since mid-July, Buffett has sold a staggering $7.2 billion worth of BAC stock, reducing Berkshire’s position by 174.7 million shares.
In just three trading days last week, Berkshire sold an additional 5.8 million shares of Bank of America stock, worth $229 million, with the stock price hovering between $39.29 and $39.67 per share.
Berkshire Hathaway’s BAC stock sales: Source: Bloomberg
As of September 2024, Bank of America stock has dipped slightly to $39.10.
Buffett’s building a cash fortress
This massive selloff has slashed Berkshire’s holdings of Bank of America down to 858 million shares, a level not seen since 2018.
The total value of the holding now stands at around $33.7 billion, a noticeable decline from the $40+ billion range earlier this year. But what’s Buffett doing with all this cash?
His company’s cash reserves surged by a whopping $88 billion in Q2 2024, bringing the total to an eye-popping $277 billion. Clearly, Buffett is gearing up for something big, though what exactly remains a mystery to most of Wall Street.
What about Apple stock?
For someone who famously avoided tech stocks for decades, Buffett shocked the investing world in 2016 when he announced a stake in Apple (NASDAQ: AAPL). The position grew so large that Apple became Berkshire’s single biggest holding, at one point making up more than half of the company’s stock portfolio.
However, Berkshire made another move in 2024 that surprised investors: selling 389 million Apple shares, effectively cutting its position in half. Despite this, Apple still accounts for 30% of Berkshire’s stock portfolio, though that’s a sharp decline from 51% in the same quarter last year.
Apple, for example, was trading at $221 in August 14, when the report was filed with the SEC, but as of September 17, the stock has slipped to $216.32, marking a slight decline in value. Recently, the company has been hit with disappointing news as the lacklustre iPhone 16 pre-order estimates show the iPhone 16 Pro and Pro Max have come in below expectations.
What’s next for Berkshire Hathaway?
With massive cuts to its two largest holdings, it’s clear Buffett is positioning Berkshire Hathaway for something. The strategy seems clear: hoard cash and be ready to make major moves. But what’s next?
As ‘The Oracle of Omaha’ continues to play his cards close to the chest, investors are left to speculate. Only time will tell, but one thing’s for sure—when Warren Buffett makes moves, the market listens.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
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