Warren Buffett just BOUGHT these stocks! | Berkshire Hathaway's portfolio revealed

Summary

Warren Buffett's Berkshire Hathaway portfolio saw significant changes in the third quarter of 2023. Notably, the firm reduced its stake in Apple by over $2 billion, cutting its holding to around 26%. Despite trimming its tech exposure, the portfolio remains concentrated, with nearly 90% of assets in the top 10 holdings. Berkshire also added small stakes in Domino's Pizza and Pool Corporation. The firm’s cash reserves reached a record $325 billion, reflecting Buffett's cautious approach to finding quality investment opportunities in the current market environment.

Takeaways

• 😀 Warren Buffett's Berkshire Hathaway has a record cash pile of $325 billion, sparking curiosity about how it will be used.
• 😀 In its third-quarter 13F report, Berkshire revealed significant stock movements, including trimming its holdings in Apple and Bank of America.
• 😀 Despite reducing its stake in Apple by over $2 billion, Apple remains a major portion of Berkshire's portfolio at 26%.
• 😀 Berkshire Hathaway's portfolio is highly concentrated, with nearly 90% of assets in the top 10 holdings.
• 😀 Buffett has reduced exposure to the banking sector, notably cutting stakes in Bank of America, Capital One Financial, and Nu Holdings.
• 😀 The firm also added two new small investments in Domino's Pizza and Pool Corporation, totaling only 0.2% of the portfolio.
• 😀 Domino's Pizza was acquired with 1.3 million shares valued at $550 million, while Pool Corporation saw the addition of 44,000 shares valued at $152 million.
• 😀 Berkshire's sale of shares has led to a record cash reserve, making up 28% of the company's size, the highest since 1990.
• 😀 Despite the cash reserves, Buffett sees few attractive opportunities in the equity markets and is building cash for future potential investments.
• 😀 Buffett's portfolio remains heavily weighted in financials, with 42% of assets in the sector, but he's been trimming positions in some stocks.
• 😀 The company's reduction in stock holdings is part of a larger trend, with $34 billion in net proceeds from sales over the last eight quarters.

Q & A

What is Warren Buffett's current strategy with Berkshire Hathaway's cash reserves?

Warren Buffett has accumulated a record cash pile of $325 billion, which represents 28% of Berkshire Hathaway's total assets. This is the highest cash-to-assets ratio since at least 1990, suggesting that Buffett is either waiting for market opportunities or preparing for a potential crisis.

Why did Buffett reduce his stake in Apple?

Buffett reduced his stake in Apple by over $2 billion in the third quarter, continuing a trend after an earlier $90 billion reduction. This is surprising given Buffett’s previous praise of Apple as a better business than other long-held investments like American Express and Coca-Cola.

What is the current proportion of Apple in Berkshire Hathaway's portfolio?

Apple now accounts for approximately 26% of Berkshire Hathaway's publicly traded portfolio, a significant reduction from over 50% previously.

What new companies did Berkshire Hathaway add to its portfolio?

Berkshire Hathaway added two new stakes in the third quarter: nearly 1.3 million shares of Domino’s Pizza, valued at $550 million, and 44,000 shares of Pool Corporation, valued at $152 million.

Why are the additions of Domino’s Pizza and Pool Corporation significant?

The additions of Domino’s Pizza and Pool Corporation, though relatively small, indicate that Buffett is still seeking value in specific sectors. Both stocks experienced a rise in trading after the investment disclosure.

How has Berkshire Hathaway's portfolio concentration changed?

Berkshire Hathaway’s portfolio remains highly concentrated, with the top five holdings—Apple, American Express, Bank of America, Coca-Cola, and Chevron—accounting for over 71% of the portfolio. This is down from 76% in the first quarter.

How much of Berkshire Hathaway's portfolio is invested in financial stocks?

Approximately 42% of Berkshire Hathaway's portfolio remains invested in financial stocks, despite a reduction in holdings in companies like Bank of America and Capital One.

What is the significance of Buffett’s continued cash accumulation?

Buffett’s decision to maintain a large cash reserve is a strategic move in an environment where attractive equity market opportunities are scarce. This cash could be used to capitalize on future market opportunities or to weather potential market downturns.

What did Buffett say about the equity markets at the annual meeting?

Buffett mentioned at the annual meeting that there are few significant opportunities in the equity markets with attractive expected returns. However, he expressed comfort in building a cash position given the current market environment.

How did Berkshire Hathaway’s recent stock sales affect the portfolio?

Berkshire Hathaway sold more than $34 billion in publicly traded stocks over the past eight quarters. These sales, along with cash generated from the business, contributed to the company’s record cash reserves.