Warren Buffett Sells Apple Stock, Raising Cash to $325 Billion
Legendary investor Warren Buffett has made a significant move by reducing his stake in Apple Inc. and other stocks, generating a whopping $97 billion in gains for his company, Berkshire Hathaway Inc. This move has raised Berkshire's cash levels to an all-time high of $325 billion, accounting for 28% of its asset value.
The reasons behind Buffett's decision are subject to speculation. Some suggest he is adhering to his value investing principles, citing Apple's relatively high price-to-earnings ratio. Others speculate he might be preparing for his successor or anticipating a potential crisis, hence the need for cash.
Buffett's decision comes after Berkshire Hathaway reported a decline in third-quarter operating earnings, driven by weakness in the insurance underwriting segment. Additionally, approximately 70% of the aggregate fair value was concentrated in five companies as of September 2024.
This move follows an earlier report where Buffett's Berkshire Hathaway missed out on $23 billion in profits by significantly reducing its stake in Apple. This move puzzled investors, with some experts suggesting Buffett prefers round numbers and others seeing it as positioning Apple as a key, long-term investment.
Buffett's decision to cash out has also raised questions about the impending management transition at Berkshire Hathaway. Some analysts suggest this could be an opportune time to clear the decks for the next generation.