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Warren Buffett’s Berkshire Hathaway has significantly reduced its equity holdings in the second quarter of 2024, according to newly released filings. The company sold a net amount of $75.5 billion in stocks over the three months ending in June, reflecting a strategic move to increase its cash reserves.
Among the notable transactions, Berkshire Hathaway dramatically decreased its stake in Apple, selling nearly half of its investment in the tech giant. This reduction contributed to a rise in Berkshire’s cash reserves, which now stand at approximately $276.94 billion. Additionally, Berkshire trimmed its investment in Bank of America, reducing its stake to 12.15%. This stake, valued at over $35 billion, had previously been the firm’s second-largest holding after Apple. The decision to sell followed a substantial 75% increase in Bank of America shares from a low in late October, just before the sale began in July.
Berkshire Hathaway’s financial statements also reported operating earnings of $11.6 billion for the second quarter. At the company’s annual meeting in May, Buffett had expressed the challenges of deploying Berkshire’s cash effectively, favouring investments with lower risk and higher return potential.
The recent sell-off coincides with a turbulent period for the U.S. stock market. Following a softer-than-expected jobs report on Friday, the market saw a significant downturn. The latest economic data has raised concerns about a more rapid deceleration of the U.S. economy, prompting investors to react negatively to adverse news.
The Federal Open Market Committee (FOMC) faces mounting pressure as major Wall Street banks, including Citi and JPMorgan, are advocating for rate cuts at upcoming meetings in September and November. This shift reflects the broader uncertainty and investor apprehension prevailing in the current economic climate.