Warren Buffett’s Berkshire Hathaway trims 3.7% of Apple stake; still holds $109.3 billion in shares

Warren Buffett’s holding company Berkshire Hathaway has filed its 13F Form with the SEC. The largest Berkshire trade in the third quarter trimmed about 3.7% of the company’s entire Apple stake.

Billy Duberstein for The Motley Fool:

Today, Berkshire’s Apple stake is still worth a whopping $109.3 billion, making up 47.78% of Berkshire’s equity portfolio.

It’s probably not a terrible idea [for Buffett] to take some chips off the table… It’s also possible the Apple stake merely became too big for even Buffett’s comfort. It could be the case that Buffett gave himself a concentration limit of 50% to any one holding, since that would have been Apple’s allocation in the Berkshire portfolio if Buffett hadn’t sold any shares.

Another reason for Berkshire’s sales could have been Buffett’s anticipation of potential tax policy changes. Prior to the election, the polls pointed to a potential “blue wave,” in which Democrats would take the White House, the House of Representatives, and the Senate. That would have meant a potential increase not only in the federal corporate tax, from 21% to 28%, but also a capital gains tax hike for high earners. As a massively profitable company, Apple’s net earnings would have been affected going forward. Similarly, since Buffett is sitting on huge capital gains, a sale at a later date could have meant a higher tax bill after a potential capital gains tax increase.

However, now that the “blue wave” hasn’t occured, and Senate control is still in question, those tax increases will, in all likelihood, not happen. Even if Democrats win the two run-off races in Georgia, it’s an open question as to whether moderate Democrats would back the proposed tax increases. Therefore, the tax reasons for selling Apple before the end of the year are likely moot.

MacDailyNews Take: This quarter, Buffett could add to their Apple stake. Of course, we won’t likely find out until after the fact.