It was also short; the book was small with large print and still only ran a little more than 100 pages. Customers find the information in the book priceless, and the compilation great. Customer Reviews, including Product Star Ratings help customers to learn more about the product and decide whether it is the right product for them. However, with the Fed set to begin cutting interest rates, and mortgage rates declining, the luster for homebuilders and their suppliers may begin to wear off. The company’s new generative AI capabilities only work on iPhone 15 Pro, iPhone 15 Pro Max, and newer models.
Buffett Takes Aim At Stock Buybacks
The company continued to repurchase stock, so earnings per share increased 11%. Apple also reported 14% sales growth in services, which come with much higher margins than its hardware products. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation.
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Although Buffett would never bet against America — i.e., you’ll never seen him buying put options or short-selling stocks — he’s not been shy about holstering his cash when value is few and far between on Wall Street. In other words, the long-term mantra the Oracle of Omaha preaches doesn’t always align with his actions over shorter timelines. That business became the foundation for what is now a globally renown holding company with a market cap of more than $492 billion. It has posted a compounded annual gain of nearly 21 percent since 1965, when Buffett first took over, according to Berkshire’s 2016 annual report.
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I say that because it gives Apple a PEG ratio of 3.4, well above the three-year average of 2.5. That may explain why Buffett has aggressively sold Apple in recent quarters, and it also leaves room for continued selling in future quarters. According to The Wall Street Journal, all told, Berkshire sold $76 billion worth of stocks in the second quarter alone, a move that helped push up the company’s cash holdings to a new record of almost $277 billion. Berkshire Hathaway’s 13F filing in mid-February show that the conglomerate was a net seller of stocks in the fourth quarter. The company dumped a significant portion of its Taiwan Semiconductor (TSM) stake while slashing its holdings in Bank of New York Mellon and US Bancorp.
Buffett and his team have been net-sellers of equities since October 2022
That may be partially true, but this feels like more of a portfolio adjustment to me. Treasury yields have soared to the highest level since the 2008 financial crisis after an aggressive Federal Reserve rate hike cycle. Six-month and one-year yields have topped 5% for the first time since 2007, while the benchmark 10-year Treasury yield sits near 4%. More than five decades since Buffett paid $7.50 a share, Berkshire’s class A stock was trading at $298,710 at the time of publication. According to InsiderScore, Buffett currently owns 282,611 class A shares.
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From the end of 2018 to December 16, Berkshire Hathaway has trailed the S&P 500, gaining about 11% while the market is up about 27%. Over the last decade, Warren Buffett, the “oracle of Omaha” and leader of Berkshire Hathaway has continued to grow his fame as a long-time value investor. The information contained herein is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed.
The company is a Dividend King with 62 consecutive years of dividend increases. American Express (AXP 1.61%) could soon take the No. 2 spot away from Bank of America. This is another instance of Buffett warning investors of the dangers of irrational exuberance on Wall Street without (key word!) telling investors to sell their stock or avoid the market altogether. That has helped Berkshire outperform the S&P 500 during difficult market environments, as shown in the chart below. Perhaps those recent sales indicate he’s losing faith in certain vulnerable equities and building that cash pile for a rainy day.
- Bill Smead of Smead Capital Management told Yahoo Finance that the record amount of cash could be to reassure shareholders if Buffett, 89, or his business partner Charlie Munger, 95, are to fall ill.
- Buffett started selling Apple in the fourth quarter of last year, but the selling has accelerated in 2024.
- Berkshire’s annual meeting also shed light on another disposition that was widely telegraphed.
In May 2023, Buffett said, “Apple is different than the other businesses we own. It just happens to be a better business.” That statement is seemingly at odds with the recent selling spree. CNBC estimates that Berkshire’s stake in Apple declined to 400 million shares in June 2024, a 55% reduction from 905 million shares berkshire hathaway letters to shareholders in December 2023. Returning to Apple, even with those busy sell-offs, Berkshire still has a huge position in the company. If history is any indication, Buffett, who’s been known to spread out his sells across quarters, will continue shedding Apple until he and his team feel the position is sized appropriately.
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Revenue rose 1.2% to $93.7 billion and operating earnings increased 16% to $11.6 billion. The shining star was the insurance segment, where operating earnings from underwriting and fixed-income investments climbed 56%. Berkshire Hathaway owns subsidiaries in a diverse range of industries, including insurance, railroads, energy, utilities, manufacturing, and retail. The core insurance business generates investable cash with which Warren Buffett has earned great returns.
At the end of last December, the market value of Berkshire’s Apple position was over $173 billion. The total market value of all Berkshire equity holdings was just under $354 billion, meaning Apple comprised just over half the portfolio in terms of dollar amount. Buffett’s last acquisition, Precision Castparts, was finalized in 2016, and he hasn’t made another successful purchase since.
These are his actual letters — word for word — a “lesson plan” of his views on business and investing. You can find most of the letters for free on Berkshire’s website, but this compiles them into a well-designed, easily readable https://forexarena.net/ format. This book compiles the full, un-edited versions of 50 years of Warren Buffett’s letters to the shareholders of Berkshire Hathaway. Bank of America is an advertising partner of The Ascent, a Motley Fool company.
