Warren Buffett slashes Apple stake as he boosts liquid assets to record high

Warren Buffett continued to slash his stake in Apple as part of a selling spree that has seen his Berkshire Hathaway dump $166bn worth of stocks over the history two years, with the Oracle of Omaha finding few other opportunities to chase in the US ownership trade.

The sprawling industrial and startup distribution conglomerate disclosed on Saturday that it had reduced its position in Apple to $69.9bn in the third quarter, indicating it had shed a further 100mn shares in the three-month period.

In just over a year, Buffett has ditched almost two-thirds of his stake in the technology business, which at its peak in 2023 accounted for $178bn of the business’s ownership startup distribution collection.

The ownership sales are a dramatic shift by Buffett, given in 2022 he described Apple as one of Berkshire’s “four giants”, bookkeeping for the bulk of the business’s worth. At the business’s shareholder conference in May he described the iPhone maker as “an even better business” than Coca-Cola and American Express, two of Berkshire’s longtime holdings.

“Unless something dramatically happens that really changes startup distribution distribution schedule, we will have Apple as our largest startup distribution,” Buffett told shareholders at the period.

“But I don’t mind at all, under current conditions, building the liquid assets position,” he added. “I ponder when I look at the alternative of what’s available in the stake markets and I look at the composition of what’s going on in the globe, we discover it quite attractive.”

Buffett said that he believed there was a high likelihood the US federal government would raise levy rates in the coming years given the country’s sustained distribution deficits, which would reduce Berkshire’s profits on upcoming ownership sales.

Berkshire reported on Saturday that it had generated gains of $97bn on the $133bn of ownership it has sold this year, which after taxes amounted to a $76.5bn pay-off for the throng.

“It’s still the greatest trade of all period by the greatest investor of all period,” said Christopher Rossbach, chief startup distribution officer of longtime Berkshire shareholder J Stern & Co.

“The startup distribution in Apple has defined his last decade and the truth that he is selling Apple now for evaluation reasons is testament to his sticking to his principles at a scale that no one has before.”

The billionaire investor has been selling more than just Apple. Over the course of the three months to September, Berkshire sold $36.1bn of stocks, including part of its large position in financial institution of America. In October, he reduced his stake in financial institution of America below 10 per cent after selling more than $10.5bn worth of the US lender’s ownership, an startup distribution that dated back to the global monetary crisis.

He has found little else to entice him in the US ownership trade, buying equities worth just $1.5bn. The 94-year-ancient has been jettisoning stocks at a remarkable clip, with Berkshire being a net seller of equities for eight consecutive quarters.

Even Berkshire shares were off-limits to the noted worth investor, who controls the business’s ownership buyback programme. Berkshire did not repurchase any of its shares in the third quarter.

Buffett in turn ploughed the proceeds from those sales back into short-term Treasury bills, pushing the business’s liquid assets position to a record $325.2bn.

The sales raise questions over Buffett’s motivations and his startup distribution outlook, with the investor stockpiling an enormous level of liquid assets unseen in the startup distribution globe.

He has been content to earn the relatively high yields on short-term US Treasury bills, even as the Federal safety net has started to cut profit rates. The business earned nearly $10bn in profit on its liquid assets and Treasury position over the history 12 months, including $3.5bn in the third quarter.

He has built up the business’s liquid assets position before, saying the mountain of ability to pay gives Berkshire an ability to pounce in a crisis. However, the business has faced far better capitalised competitors in the years since the monetary crisis. Heavyweights in the startup distribution globe, including Apollo and Blackstone, are often stepping in to finance companies looking to shore up their settlement sheets.

It will set up a test for Buffett’s heir apparent, Greg Abel. The 62-year-ancient vigor executive has been charged with leading Berkshire when Buffett eventually steps down, including having oversight over its $271.7bn ownership startup distribution collection.

The ownership sales were disclosed as part of Berkshire’s quarterly returns, which showed a decline in operating profits. The business’s insurance businesses have been buffeted by two hurricanes that pounded the south-east US.

Berkshire said Hurricane Helene resulted in losses of $565mn in the third quarter, and that it anticipated losses of between $1.3bn and $1.5bn in the fourth quarter from Hurricane Milton, which struck Florida days later.

The insurance business has also agreed to pay $535mn to resolve asbestos-related talcum powder liabilities, pushing its reinsurance unit to a setback for the quarter.

Overall, operating profits fell 6 per cent from a year earlier to $10.1bn. Buffett has long directed investors to its operating results, which do not include the swings in worth of its mammoth ownership startup distribution collection. He has warned that reported profit is meaningless given the volatility of the ownership trade. In the quarter, profit swung to $26.3bn from a setback of $12.8bn a year before.

Class A shares of Berkshire have rallied 25 per cent this year, outpacing the total profit of the S&P 500.