Warren Buffett’s Berkshire Hathaway clearly sold the wrong stock this year. By selling some 600 million shares of Apple, Buffett’s company has left over $35 billion on the table so far in 2024. For some perspective, HP Inc. in its entirety is currently worth $31 billion.
The Berkshire Hathaway CEO has cut the company’s big stake in Apple by two thirds to 300 million shares. Barron’s estimates that Berkshire Hathaway has left over $35 billion on the table given Apple’s 31% gain this year to $253, comfortably above our estimate of Berkshire Hathaway’s average sale price of $190.
By contrast, Buffett has added to the Berkshire Hathaway’s sizable Occidental stake and it now holds 255 million shares, a 27% stake in the energy company.
Unfortunately, Occidental stock has done poorly this year, falling 21% to $47 after hitting a new 52-week low Tuesday. Barron’s estimates that Berkshire Hathaway paid an average price of about $53 a share, based on the disclosed prices paid for most of the stake.
Barron’s estimates that Berkshire Hathaway has paper losses of around $1.5 billion on the Occidental stake…
MacDailyNews Take: There’s no two ways about it: Leaving over $35 billion on the table in a single year on a single stock is simply legendarily bad investing.
If Buffett’s calling these nonsensical, losing shots, maybe it’s time he wasn’t. If Buffett’s no longer making the calls, that doesn’t bode well for Berkshire Hathaway’s future.
Please help support MacDailyNews — and enjoy subscriber-only articles, comments, chat, and more — by subscribing to our Substack: macdailynews.substack.com. Thank you!
Support MacDailyNews at no extra cost to you by using this link to shop at Amazon.
It’s fair to say that Buffett has lost his touch. Time to retire.
If this is the best level of analysis you can offer, then YOU should retire.
It’s easy to criticize short term performance when you don’t understand the long term strategy
If you don’t understand his reasons for buying Occidental or selling Apple, and this article gives no indication you do, you’re not well placed to comment.
Anyone who knows anything about Buffet knows that his concern is intrinsic value, not how the market values stock at any moment in time. Market price & intrinsic value are not always,or even often, going to align. Buffett’s been successful as he’s rather better than most at recognising when stocks are overvalued (a selling opportunity) or undervalued (a buying opportunity).
How smart these particular buy/sell decisions prove to be will be seen in time. Only idiots hang on to stocks they believe to be overvalued, if the price continues to go up for a while that doesn’t make them less of an idiot as no-one can say when the price correction will come or how abrupt it will be.
The writer would have more credibility if he could make a cogent argument why Apple isn’t overpriced or Occidental underpriced.
This is an extremely poorly written piece with a lack of understanding of buffets investment strategies – its poor journalism at its best and insulting at its worst.
Doubting a man with a lifetime of investment experience who continues to out perform benchmarks and made billions through his decisions because he sold an over priced stock? According to you he left money on the table?
Did he? There is no guarantee in investing if he sold later it could have been a loss if the market moved against him. You never look at what you could have made but at the profit or loss you did make at the time as the positive now could be negative tomorrow and no one can predict the market.
Simply put he hedged the position, stuck to his principle which he has built over decades. If he had held onto the position and it made a loss would you now be saying that he should have sold? Can he win here with your nonsense reporting?
He now has a massive cash position which can be used when there is a market crash/correction which no doubt there will be given the over inflated price of stocks. But you keep doubting the most renowned investor – I’ve sold my investments at a profit (Thanks buffet – ill sit on cash and buy when everything js low after the crash as I now have cash ready may be six months maybe a year but it’s coming.
Lot of apologists here. Bottom line, he missed out on a big run.
It’s no big deal. You can’t win them all, and overall Warren has done well for a very long time. That said, he blew it here. Thems the facts.
The “intrinsic value” is battle cry of losers. The ledger on investing isn’t “intrinsic value”, it’s the number in your account, and it tells the truth.
And the truth here is Warren blew it early and missed out on a huge run. Simple as that.
Everytime an article like this gets written in my 45 years on earth, it’s the end of the bill run and a giant market collapse ensues
This articles claim is baseless. He’s building liquidity because he sees nobody else is. When the market crashes, he’s gonna be the only one with that much cash to buy and bail out companies on his terms. He did the exact same thing a couple decades ago before 08.
This articles claim is baseless. He’s building liquidity because he sees nobody else is. When the market crashes
Missing out on a $35 billion Apple rally after cutting that much stock is a headline-worthy misstep—even legendary investors can get it wrong sometimes