Famed investor Warren Buffett again trims stake in Apple

Warren Buffett [Berkshire Hathaway]

The Sage of Omaha has decided to trim his Apple holdings, as part of what appears to be a small move away from big tech.

Buffett first invested in Apple in only 2016, and since then chiefly increasing its investment, starting in 2017 when it nearly quadrupled its stake in the company. By 2022, his Berkshire Hathaway firm was already reported to have earned over $100 billion from holding Apple shares.

According to the Financial Times, however, Buffett's firm sold off 10 million Apple shares in the last three months of 2023. That represents around 1.1% of the company's total stake in Apple.

At the same time, Buffett also cut back on HP shares. Berkshire Hathaway added to what it holds in Occidental Petroleum and Chevron with the proceeds from the sales.

This leaves Buffett's firm with 5.9% of all Apple shares, and the Financial Times says this position was worth $174 billion at the end of 2023. During 2022, Buffett revealed that Berkshire Hathaway had spent just over $31 billion in buying Apple shares.

The Q3 2023 sell off is not the first time that Berkshire Hathaway has trimmed its stake. In Q3 2020, the firm sold 36 million shares, and then in Q4 2020, it sold some 6% of its stock.

However, the new Financial Times report also quotes Buffett has having said in 2021 that the recent sale of Apple shares was "probably a mistake."

Known also as the "Sage of Omaha," Buffett has described the iPhone as an "extraordinary product." He said it was so crucial to its users that "[if] they have to give up a second car or give up their iPhone, they'd give up their second car."

Buffett's annual letter to shareholders will be released on February 24.

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8 Comments

AppleZulu

said about 2 months ago

So. Rebalancing the portfolio. Not disinvesting in Apple.

Massiveattack87

said about 2 months ago

AppleZulu said:

So. Rebalancing the portfolio. Not disinvesting in Apple.

Nobody knows, but we will see if he is still selling in Q1 2024.

Warren Buffett sold AAPL from time to time in the past (2021) and at the end, he regretted his decision for selling it.

But there are some initial thoughts:
1. Warren Buffett did not sell, but one of his lieutenants did.
2. Warren Buffett did not sell, but one of his holding companies belonging to Berkshire Hathaway, which also held AAPL, trimmed it.
3. Warren Buffett sold for rebalancing or for whatever reasons.

But AAPL is too expensive now without any growth rates (Just 2% growth) for 2 years. It does not justify PE x30 for a company, which is compared to other Magnificant Six.

AAPL also has a high China exposure.
If you look at the portfolio of Berkshire, most comapnies have no exposure to China or very minimal. BAC, V, AMEX, AMZN, KO etc. are not really present in China or are not heavily hurt by Chinese economy or goverment,

Maybe, he sees a geographical risk like he trimmed TSMC.

OF course, AAPL is a very complicated story because there are a lot of Chinese employees working for Foxconn and indirectly fro Apple (China would be very cautious to be "Anti Apple" given the current umemployee rate on high level in China).

But I am pessimistic about AAPL´s performance in the near term.
I am not quite sure if their WDCC or Generative AI would pump their sales to the moon.

40domi

said about 2 months ago

You usually sell shares when they're high and re buy them when they're low.
Selling 1% of your shares, hardly means a move away from Apple.
I suspect Apple shares will fall this year, I don't think the products launched this year, will be very desirable, due to Apple's incremental upgrades policy and overcharging for storage and memory in their products (Mac's in particular) sooner or later Apple will take a hit and I suspect Warren is betting, it's 2024....than he will re buy the shares and make a huge profit

mattinoz

said about 2 months ago

40domi said:

You usually sell shares when they're high and re buy them when they're low.
Selling 1% of your shares, hardly means a move away from Apple.
I suspect Apple shares will fall this year, I don't think the products launched this year, will be very desirable, due to Apple's incremental upgrades policy and overcharging for storage and memory in their products (Mac's in particular) sooner or later Apple will take a hit and I suspect Warren is betting, it's 2024....than he will re buy the shares and make a huge profit

And the best thing about being Warren Buffet is press reports, even the smallest of trims, and the stock price moves downwards. I'm sure they will probably sell 10x what they want to sell, then back 9 out of 10 shares in a week.

chasm

said about 2 months ago

To misquote Arnold Schwarzenegger, "He'll be bach." :smiley:

AAPL's growth rate thus far this year isn't the 45 percent it was for 2023 (in total), but given current economic concerns I'd say they're lucky to be in positive territory at all.

I remain confident that AAPL will do about as well as one could realistically expect this year by the time it's all over -- but I did note that MSFT somehow performed better last year (up 54 percent) based almost entirely on the strength of one subscription (mostly) product, which I find a little odd. Not exactly an innovation factory is MS these days ...