Warren Buffett’s Berkshire Hathaway is selling Apple stock and sitting on more cash than ever
Warren Buffett’s Berkshire Hathaway (BRK.A) has continued to sell off considerable stakes in several companies as it grows its cash pile to a record $325.2 billion.
In the third quarter, Berkshire sold $36.1 billion of stock overall, including from major holdings Apple (AAPL) and Bank of America (BAC), the company disclosed in regulatory filings Saturday. Meanwhile, it purchased just $1.5 billion of stock in that same period.
Berkshire also added $48.3 billion to its cash hoard in the quarter, including by freezing stock buybacks — meaning it didn’t repurchase any shares of its own company.
“Berkshire is a microcosm of the broader economy,” Cathy Seifert, an analyst at CFRA Research, told Reuters. “Its hoarding cash suggests a ‘risk off’ mindset, and investors may worry what it means for the economy and markets.”
Other business leaders are already beginning to take Buffett’s focus on cash as a sign of caution. When CEO Jamie Dimon was asked about JPMorgan Chase’s (JPM) capital deployment plans on a call with analysts following the bank’s third-quarter earnings report last month, he pointed to the so-called “Oracle of Omaha” as an example — particularly during a “treacherous” geopolitical landscape.
“Cash is a very valuable asset sometimes in a turbulent world,” he said. “And you see my friend Warren Buffett stockpiling cash right now. I mean, people should be a little more thoughtful about how we’re trying to navigate in this world and grow for the long term for our company.”
In the three months ending on Sept. 30, the sprawling, Omaha-based conglomerate shed roughly a quarter of its remaining stake in Apple to $69.9 billion — the fourth consecutive quarter of cuts to its holdings of the iPhone maker. That’s down by almost two-thirds from the $174.3 billion it owned at the start of the year and comes after Berkshire halved its Apple stake in the second quarter.
During a question-and-answer session with Buffett at Berkshire’s annual shareholder conference in May, the 94-year-old investor said it’s “extremely likely” Apple remains Berkshire’s largest common stock holding — and that will stay that way unless something dramatic happens.
Last quarter, Berkshire also dumped about $10 billion of its Bank of America holdings in a series of sales starting in mid-July. Bank of America CEO Brian Moynihan said at an event in September that while Buffett has been a “great” investor in the company, Moynihan doesn’t know why Buffett is offloading its long-term investment in the bank.
Apple’s shares are up 20% year-to-date, performing in line with the S&P 500. Bank of America stock is up 23% so far this year.
