Why Has Warren Buffett Been Selling So Much Stock? | Global News Avenue

Warren Buffett Cash is being hoarded. His Berkshire HathawayBRK.A; BRK.B) Holdings’ third-quarter sales continued to outpace purchases, including a quarter of a share In Apple (AAPL), a regulatory filing disclosed Thursday.

Berkshire Hathaway reduced its stake in Apple from nearly $175 billion at the beginning of the year to about $70 billion at the end of September. Berkshire’s third-quarter earnings report earlier this month hinted at the recent sell-off, but it has not yet been formally disclosed to the public. However, the iPhone maker still accounts for about a quarter of Berkshire’s $266 billion stock portfolio.

In addition to Apple, Berkshire also sold approximately 235 million Bank of America shares (Buck). This is well known because Berkshire is obliged to report its Sell ​​Bank of America Stock This occurred throughout the quarter as it owns more than 10% of the lender.

Berkshire’s cash reaches record level

The filings come after Berkshire Hathaway said earlier this month that its cash reserves had dwindled. increased to a record $320.3 billion Sales in the third quarter were $271.5 billion, compared with $271.5 billion in the previous quarter. Of this amount, US$288 billion was used for short-term investments treasury bills. Berkshire has accumulated cash in each of the past nine quarters.

Investors closely monitor the potential of Berkshire’s cash hoard as ‘dry powderOne potential reason Buffett is keeping this powder dry: The “Oracle of Omaha” may not see much room for growth in the market.

The ratio of Stock market capitalization to GDP ratioalso known as the “Buffett Indicator”, is used to determine whether the overall market is undervalued or overvalued. The total value of the stock market hit a record high of $58.13 trillion on Monday, “accounting for an unprecedented 198.1% of U.S. GDP in the last quarter.” business insider wrote, citing Wilshire index data.

This number is a major red flag for Buffett. in a famous wealth Buffett said in a 2001 article, “If the ratio approaches 200%—as it did in 1999 and part of 2000—then you are playing with fire.”

Correction – November 15, 2024: This article has been updated to correctly state the size of the U.S. stock market relative to GDP.