Warren Buffett Sold 14% of $AAPL. Follow ?
Apple Reduction II.
$Berkshire Hathaway(BRK.B)$ cut its $Apple(AAPL)$ stake again in Q1 2024. as Warren Buffett continued to downsize his one-time favorite bet.
On Sat, 04 May 2024, Berkshire’s Q1 earnings reported its Apple holdings was worth $135.4 billion.
This worked out to be around 790 million shares: a decline of approx. -13% of its Apple shares.
This was the 2nd consecutive quarter that Berkshire has trimmed its stake in the iPhone maker.
Despite the sell down, Apple remains Berkshire’s biggest holdings.
Apple Reduction I.
The first sale happened in Q4 2023.
Back then, Berkshire sold about 10 million Apple shares or 1% of its holdings.
Considering Apple’s stock price movement, it implied Berkshire had sold about 116 million shares.
Sale Reason.
During the Q&A part of Berkshire's annual meeting (Omaha), Buffett explained the sale was for tax reasons because the stock price had gone up a fair bit.
Mr Buffett also hinted the sale (now) was to pre-empt paying more taxes later on, especially if US interest rates rise to fund a ballooning US fiscal deficit.
The Oracle of Omaha became a big fan of Apple after one of his investing managers (Ted Weschler or Todd Combs) convinced him to buy the stock years ago.
Even Mr Buffett called the tech giant his 2nd-most important business after Berkshire’s cluster of insurers.
Not quite Dec 2023's peak.
Public Opinion.
Many had speculated that the 93-year-old investing icon reduced his favorite stake due to valuation concerns.
Apple’s stock had gained a whopping 48% in 2023 as mega cap tech shares led the market rally.
At its peak, Apple ballooned in Berkshire’s equity portfolio, taking up 50% of it.
The shares are trading at more than 27x forward earnings.
Nevertheless, Mr Buffett continued to praise Apple at the meeting, saying it was “extremely likely” that Apple will remain Berkshire’s largest holding at the end of 2024.
Apple’s Strategy.
Apple shares got a big boost last week after it announced that Apple’s Board of Directors have authorized a $110 billion in share repurchase.
This repurchase will be the largest in company history, coming at a time when Apple posted a decline in:
Overall sales.
iPhone sales.
Shares are down more than -4% YTD, amid concerns on how Apple will revive its growth.
My viewpoints: (mine & mine only)
Did Berkshire sell part of its Apple’s holdings a little too early?
Should Mr Buffett have waited until after Apple’s annual Worldwide Developers Conference (WDC) that will take place the week of June 10–14, 2024?
Reason being, it is rumoured that after falling behind its peers in the Artificial Intelligence race, Apple is keen to set the record straight. (see below)
If the rumours are “accurate”, mid June 2024 might be the time for Apple to shine again.
And perhaps re-claim its crown as the X trillion market cap company?
The takeaways from Mr Buffett’s sell “saga” is, when it is time to sell and take profit, do NOT hesitate.
Always sell in tranches and spaced the sales apart.
Regarding Mr Buffett’s politically correct mention — “Apple will remain Berkshire’s largest holding at the end of 2024”, it is both vague and ambiguous to me. (see below)
It does not address concerns that Berkshire will not sell more of Apple shares.
Even if Apple’s shares dwindle to 11% of Berkshire’s holdings (not that it will), it remains Berkshire’s largest holdings.
Will the truth behind the sale of Apple shares ever be known? Perhaps or maybe not.
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Do you think Berkshire Hathaway should have waited until June to sell its Apple’s shares ?
Do you think Mr Buffett will continue to reduce Apple’s shares in its holdings?
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Big AI news for aapl at $200 o’clock
No AAPL is still a good stock for long term holding