WASHINGTON: Warren Buffett and Berkshire Hat­haway extended their retreat from stocks in the third quarter, further slashing holdings in Apple and boosting cash to a record $325.2 billion.

In its quarterly report on Saturday, Berkshire said it sold about 100 million, or 25 per cent, of its Apple shares over the summer, ending with about 300 million.

Berkshire has now sold more than 600 million of the iPhone maker’s shares in 2024, though Apple remained its largest stock holding, at $69.9 billion.

It sold $36.1 billion of stock overall, including several billion dollars of Bank of America shares, and bought just $1.5 billion. That made the quarter the eighth straight where Berkshire was a net seller of stocks.

The Omaha, Nebraska-based conglomerate also conducted no stock buybacks for the first time since the second quarter of 2018, and did not repurchase stock in the first three weeks of October.

“Berkshire is a microcosm of the broader economy,” said Cathy Seifert, an analyst at CFRA Research in New York. “Its hoarding cash suggests a ‘risk-off’ mindset, and investors may worry what it means for the economy and markets.” The Class A shares of Berkshire are up 25pc this year, while the Standard & Poor’s 500 has risen 20pc.

Rising valuations have fueled concerns among some investors that many stocks have become too expensive. Berkshire’s cash stake grew from $276.9 billion at the end of June, and is more than 10 times the $30 billion cushion that Buffett has pledged to maintain.

Buffett has made no major acquisitions of whole companies for his $975 billion company since 2016.

Jim Shanahan, an analyst at Edward Jones in St. Louis, said the swelling cash hoard “begs questions about whether Buffett thinks stocks are overvalued or an economic downturn is coming, or is trying to build cash for a big acquisition.”

In May, Buffett said he expected Apple to remain Berkshire’s largest stock investment, but selling made sense because the 21pc federal tax rate on gains would likely grow.

Berkshire’s quarterly operating profit declined 6pc to $10.09 billion, or about $7,019 per Class A share, missing analyst estimates of $7,611 per share.

Published in Dawn, November 3rd, 2024