Billionaire investor Warren Buffett (Trades, Portfolio), known as the “Oracle of Omaha,” has slashed his bet on Apple by 56% to 400 million shares in the past few quarters at Berkshire Hathaway (BRK.B, Financial). It is the largest divestment recorded in the latest filings of Form 13F of the Securities and Exchange Commission documenting Buffett’s investment changes.
Since Buffett took over the helm of Berkshire Hathaway, this company has registered some of the highest returns anywhere in the world, but recent maneuverers depict that this giant is now turning cautious; after October 2022, Buffett and his team sold equities worth $132 billion while they bought only $11 billion worth. This period of net selling shows that organisations are willing to make changes in anticipation of an economic change, such as an anticipated rise in corporate tax rates.
Although net of tax gains, Buffett’s decision to substantially reduce Berkshire’s stake in Apple through open market sales was publicly debated at the Berkshire Hathaway Annual General Meeting. He suggested that the rise in tax measures meant that it may be prudent for there to be gains at a better tax level, generally during the current period.
Also, he is turning the focus to what he regards as Wall Street’s largest reverse stock split of 2024, indicating that he is changing the direction of his investment strategy. Such a step is consistent with his previous actions, which relied on forecasts of macroeconomic variables and microeconomic results.
Therefore, this kind of significant shedding from Berkshire’s portfolio area is done under keen observation by the financial fraternity since the man at the helm, Warren Buffett (Trades, Portfolio), is known to execute transformative market trend strategies just before everyone else. This latest manoeuvre is no exception and maybe the signal for new investment paradigms as fiscals and markets shift.
This article first appeared on GuruFocus.
