Berkshire Hathaway has sold well over half of its stake in Apple in recent years, significantly reducing the tech giant’s weight in its portfolio. Once accounting for roughly half of Berkshire’s equity holdings, Apple no longer represents such a dominant position. Importantly, the massive stock sale had nothing to do with any concerns over Apple’s business performance.
David Jagielski for The Motley Fool:
Apple has been a staple in Berkshire’s portfolio, but in recent years, Berkshire has not only been trimming its position in the tech company, but it’s been drastically unloading it. From its peak, Berkshire has reduced its stake in Apple by more than 75%. While it’s still the top holding and the position is worth close to $60 billion today, it no longer accounts for more than half of the portfolio, as it did in the past.
And that, it seems, was the big problem for Buffett. “I wasn’t happy for it to be larger than everything else combined.” Today, Apple’s stock accounts for just under 19% of Berkshire’s portfolio, with American Express not being far behind at 15%. A few years ago, the delta was much more significant between the first and second holdings.
Another factor that may have played a big role in Buffett’s decision to sell Apple stock was likely the significant profit the company was sitting on from the position. Berkshire has made over $100 billion in profit on the sale of Apple stock. And with uncertainty around taxes and how capital gains might be treated in the future, securing those profits may have motivated Buffett to sell sooner rather than later.
Over the past five years, both Berkshire and Apple have been solid investments, with the former generating returns of 79% and the latter nearly doubling in value. Going forward, they still look like terrific investments to buy and hold.
MacDailyNews Take: So, if he were following his own advice, Buffett’s real reason for selling Apple shares was a bad reason. Having a single stock holding that exceeds everything else in your portfolio combined isn’t necessarily a problem — especially in light of Buffett’s well-known views on the subject. As he has famously said, “Diversification is protection against ignorance. It makes little sense if you know what you are doing” and “invest in what you know.”
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. – MacDailyNews, December 18, 2024
See also:
• Berkshire Hathaway’s Warren Buffett on Apple sale: ‘I sold it too soon’ – March 31, 2026
• By selling the wrong stock, Apple, Warren Buffett’s Berkshire Hathaway has left over $35 billion on the table this year – December 18, 2024
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