Sold 55.8% of Apple Shares This Year
Record High Cash Holdings
'The Sage of Omaha' Warren Buffett has halved his Apple stake and increased his cash holdings to a record level. With recent US employment data worsening and recession fears spreading, attention is focused on Buffett's moves.
According to Berkshire Hathaway's (hereafter Berkshire) Q2 earnings report released on the 3rd (local time), the value of Berkshire's Apple stake as of the end of June was $84.2 billion (about 115 trillion KRW). This is half of the $174.3 billion (about 237 trillion KRW) held at the end of last year, meaning it has been reduced by half in six months. It is estimated that 55.8% of the Apple shares were sold this year. Berkshire's cash holdings increased to a record high of $276.9 billion (about 377 trillion KRW).
Berkshire had also sold about 115 million Apple shares in the Q1 disclosure. Regarding this, Buffett reassured shareholders at the May shareholders' meeting that the Q1 Apple stock sale was a measure to prepare for a future capital gains tax rate increase and that Apple remains an important long-term investment. However, with Apple shares halved again in Q2, Buffett's explanation that it was for tax saving purposes has been criticized as losing credibility.
CNBC evaluated, "Given the scale of this sale, it may mean more than just simple tax reduction." Jim Shanahan, an analyst at Edward Jones, said, "It was a much larger sale than we expected," and diagnosed, "Buffett seems to think there are no more attractive opportunities in the stock market."
In particular, the recent deterioration of US economic indicators, which has spread recession fears among investors, is also a factor giving meaning to Buffett's sales and cash holdings. Earlier, the July manufacturing PMI (Purchasing Managers' Index) remained below 50, indicating economic contraction, and weekly initial jobless claims also hit a one-year high, reinforcing contraction signals. As a result, last week the three major indices of the New York Stock Exchange all closed lower, and the Nikkei also plunged nearly 6%, recording the second-largest drop in history.
Cash Seifert, a CFRA analyst, said, "Considering Berkshire's situation and macroeconomic data, it can be seen that the company has started to take a defensive stance." Jim Awad, Senior Managing Director at Clearstead Advisors, explained, "Buffett has a good nose for money," adding, "He may be accumulating cash to buy stocks at low prices in preparation for a recession."
Meanwhile, last week on the New York Stock Exchange, Apple's stock closed at $219.86, up 0.69% from the previous session. Berkshire's stock closed down 0.80% at $428.36.
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