To some investors, Berkshire Hathaway’s halving of its massive Apple stake could be interpreted as a lack of conviction in the company’s growth story. But many Wall Street analysts say investors should stay calm.
Carmen Reinicke for Bloomberg News:
The Warren Buffett-led conglomerate revealed Saturday that it sold almost half of its position in the tech giant during the second quarter. Its stake now stands at roughly $84 billion, down from about $140 billion at the end of March.
“Buffett’s reduction of his Apple stake is merely about risk management,” said Joe Gilbert, senior portfolio manager at Integrity Asset Management. “If there were any concerns about the longer-term viability of Apple, Buffett would have exited the entire position. Similar to Berkshire’s other stock position reductions, Buffett has meaningful unrealized gains.”
Even after the unwind, Apple remains Berkshire’s largest single position.
“If you’ve got this outsized position you take some profits and you reduce some of your concentration risk,” said Cathy Seifert, a research analyst at CFRA. “They still have a fairly concentrated portfolio,” she added.
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MacDailyNews Take: As Warren Buffett himself said so well:
Be fearful when others are greedy and greedy when others are fearful.
Imagine you can move the markets like Warren Buffet. You sell when the stock price rises. The news of your sale drives prices lower. Then you pick up more shares. Lather, rinse, and repeat.
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[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
Have been accumulating AAPL since 2016 and have a significant amount, with no intention to sell any.
Have been accumulating AAPL since 2010 and have a significant amount, I intend to sell some this year. Apple shares aren’t collectors items, they’re financial vehicles for achieving your goals. Buffett knows what he’s doing lessening his exposure to big tech right now.
MDN, you quote Warren Buffet – and then suggest something entirely different with “Imagine you can move the markets like Warren Buffet. You sell when the stock price rises. The news of your sale drives prices lower. Then you pick up more shares. Lather, rinse, and repeat.”
Do you have any evidence that Buffet has ever done this – i.e. sell high with the intent of buying low when others follow?
More likely, Buffet is following the first part of what you quoted: “Be fearful when others are greedy”. He’s been reducing his equity portfolio across the board, according to what I’ve read. Supposedly he’s now $700b+ in cash – presumably because he thinks the market is way overvalued and there are also signs of a recession again. I think that $700b+ is now sitting in wait to be deployed when/if the recession does happen, leading to the second part of his quote “…be greedy when others are fearful”.
MDN need provide no evidence. MDN’s statement is self-evident. MDN doesn’t say Buffett intends this to happen, merely that it does happen.
Buffett moves the market. Everybody knows this, including Buffett.
“Imagine you can move the markets like Warren Buffet. You sell when the stock price rises. The news of your sale drives prices lower. Then you pick up more shares. Lather, rinse, and repeat.”
Let the weenies panic-sell. That way Apple can repurchase more shares at a cheaper price and increase the value of my shares that I’ll continue holding until I need to sell them.
Apple-long 2004 and I’ve seen worse times than this in 2008.