Warren Buffett's Berkshire halves stake in Apple, now has $270 bn cash pile

With the recent sell-offs, Warren Buffett-led Berkshire Hathaway has raised its cash position relative to total assets in the June quarter to 25 percent

Billionaire Warren Buffett-led Berkshire Hathaway has sold 50 per cent of its stake in Apple Inc. The company has also pared its stake in Bank of America, trimming it by 8.8 per cent since July.
 

Due to the selling spree, Berkshire's holdings in cash and cash equivalents have reached a record $276.9 billion. This level of cash pile was last seen with the Warren Buffett company in 2005. With the recent sell-offs, the company has raised its cash position relative to total assets in the June quarter to 25 per cent. 
 

Earlier, in May, during Berkshire’s annual general meeting (AGM), Buffett had clarified he was not in a rush to buy more equity, “unless we think we’re doing something that has very little risk and can make us a lot of money”.
 

 

However, despite the selloff, Apple remains Berkshire’s biggest stock investment. It now holds $84.2 billion in the company’s stock, down from the $174.3 billion it owned at the start of the year. It has reduced its stake in the company for three consecutive quarters.
 

Berkshire’s June quarter shareholding also showed small stakes in cosmetics chain Ulta Beauty and aerospace company Heico.

Is Buffett turning ‘bearish’?
 

In a social media post on X, The Kobeissi Letter wondered if Buffett was turning bearish, pointing out that Berkshire’s share of cash holding has more than doubled in just two years. The Kobeissi Letter is a commentary on the global capital markets founded by Adam Kobeissi.

This is incredible:

Warren Buffett's Berkshire Hathaway’s cash position relative to total assets spiked to 25.0% in Q2 2024, the most in at least 24 years.

The company's share of cash has more than DOUBLED in just 2 years.

To put this into perspective, the company’s cash pile… pic.twitter.com/LgMklJ5HcQ

— The Kobeissi Letter (@KobeissiLetter) August 14, 2024

Other market experts are also drawing a similar conclusion as Berkshire’s sell-off spree comes at a time when the risk of a US recession has been floating amid weak US employment indicators. However, another section believes that the sell-off is triggered by fears of higher corporate taxes going forward.
 

“With present fiscal policies, I think something has to give. And I think higher taxes are quite likely,” Buffett had said during the Berkshire AGM in May 2024.