Warren Buffett Trims Apple Holdings as Berkshire Hoards Record Cash Pile

Legendary Investor Warren Buffett’s Berkshire Hathaway significantly reduced its bet on Apple, reducing stakes by 100 million in the third quarter of 2024. Regulatory records revealed that Berkshire Apple’s investment value fell by more than 50% from its peak in 2023, from $178 billion to $69.9 billion. While Apple remains Berkshire’s largest individual equity investment, the decision underscores Buffett’s adherence to its core investment principles, emphasizing the intrinsic value of market exuberance. “Apple has defined Buffett’s last decade,” said Christopher Rossbach, Stern & Co.’s investment manager, adding that this movement demonstrates Buffett’s unwavering commitment to evaluation discipline.

This is not the only portfolio adjustment that Berkshire made recently. The conglomerate also reduced its position in the Bank of America, selling approximately 235 million shares. In total, Berkshire plunged into reserves of $36.1 billion last quarter, increasing its cash reserves to a record $325.2 billion. The cash deposit increased for nine consecutive quarters, with $288 billion now stationed in short-term Treasurys, generating significant interest income. In the last quarter alone, Berkshire earned $3.5 billion in interest income, far exceeding its income per dividend. “This accumulation of money suggests a risk mentality,” said RCAF research analyst Cathy Seifert, asking questions about Buffett’s outlook for the economy and markets.

Buffett’s prudent position is in the middle of an emerging stock market, with S plagaamp; P 500 and Nasdaq Composite up to 20% and 21% per day, respectively. However, the so-called Buffett indicator, which measures the ratio of total stock market value to GDP, has recently reached 209 per cent, well above the 200 per cent threshold that Buffett historically described as “playing with fire.” This sign of overvaluation, coupled with economic uncertainty after the presidential elections of 2024, probably influenced Berkshire’s conservative strategy. Analysts believe that possible changes in fiscal policy in the new administration could further complicate the investment landscape.

Despite this caution, Buffett has identified long-term investment opportunities in the market in general. Among the outstanding features of Berkshire is Amazon, which has a predominance in electronic commerce and cloud computing by its Amazon Web Services (AWS) division. AWS recorded a 19% increase in sales in the third quarter, contributing to strong growth in Amazon’s operating revenues. In addition, Buffett continues to advocate simple and diversified investments such as the Vanguard S flexible amplifier; P 500 ETF, emphasizing its reliability as a tool to promote wealth over the long term. While Buffett’s recent movements reflect prudence, they also emphasize their faith in strategic preparation in the middle of an overheated market.