The company continued to repurchase stock, so earnings per share increased 11%. Apple also reported 14% sales growth in services, which come with much higher margins than its hardware products. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation.
How We Make Money
From the end of 2018 to December 16, Berkshire Hathaway has trailed the S&P 500, gaining about 11% while the market is up about 27%. Over the last decade, Warren Buffett, the “oracle of Omaha” and leader of Berkshire Hathaway has continued to grow his fame as a long-time value investor. The information contained herein is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed.
Chevron
The company is a Dividend King with 62 consecutive years of dividend increases. American Express (AXP 1.61%) could soon take the No. 2 spot away from Bank of America. This is another instance of Buffett warning investors of the dangers of irrational exuberance on Wall Street without (key word!) telling investors to sell their stock or avoid the market altogether. That has helped Berkshire outperform the S&P 500 during difficult market environments, as shown in the chart below. Perhaps those recent sales indicate he’s losing faith in certain vulnerable equities and building that cash pile for a rainy day.
Apple
I say that because it gives Apple a PEG ratio of 3.4, well above the three-year average of 2.5. That may explain why Buffett has aggressively sold Apple in recent quarters, and it also leaves room for continued selling in future quarters. According to The Wall Street Journal, all told, Berkshire sold $76 billion worth of stocks in the second quarter alone, a move that helped push up the company’s cash holdings to a new record of almost $277 billion. Berkshire Hathaway’s 13F filing in mid-February show that the conglomerate was a net seller of stocks in the fourth quarter. The company dumped a significant portion of its Taiwan Semiconductor (TSM) stake while slashing its holdings in Bank of New York Mellon and US Bancorp.
Warren Buffett’s Unprecedented $132 Billion Warning to Wall Street Can’t Be Ignored Any Longer
At the end of last December, the market value of Berkshire’s Apple position was over $173 billion. The total market value of all Berkshire equity holdings was just under $354 billion, meaning Apple berkshire hathaway letters to shareholders comprised just over half the portfolio in terms of dollar amount. Buffett’s last acquisition, Precision Castparts, was finalized in 2016, and he hasn’t made another successful purchase since.
Reviews with images
That may be partially true, but this feels like more of a portfolio adjustment to me. Treasury yields have soared to the highest level since the 2008 financial crisis after an aggressive Federal Reserve rate hike cycle. Six-month and one-year yields have topped 5% for the first time since 2007, while the benchmark 10-year Treasury yield sits near 4%. More than five decades since Buffett paid $7.50 a share, Berkshire’s class A stock was trading at $298,710 at the time of publication. According to InsiderScore, Buffett currently owns 282,611 class A shares.
- Buffett was just an investor in the business like any other until a dispute arose.
- “With our present mix of businesses, Berkshire should do a bit better than the average American corporation and, more important, should also operate with materially less risk of permanent loss of capital,” Buffett wrote in his most recent shareholder letter.
- This is sure to keep dinging the stock, but Apple bulls should hold fast.
Berkshire has owned shares of The Coca-Cola Company (KO 0.47%) longer than any other stock. Buffett thinks that Coke is a “truly wonderful business” that Berkshire will “maintain indefinitely.” Following a quarter that featured historic levels of equity sales, Berkshire’s cash pile, which includes cash equivalents and U.S. The options available to Buffett and his top aides are seemingly limitless. If there’s a valuation model that demonstrates just how pricey stocks are right now, it’s the S&P 500’s Shiller price-to-earnings (P/E) ratio, which is also commonly referred to as the cyclically adjusted price-to-earnings ratio, or Cape ratio.
These are his actual letters — word for word — a “lesson plan” of his views on business and investing. You can find most of the letters for free on Berkshire’s website, but this compiles them into a well-designed, easily readable format. This book compiles the full, un-edited versions of 50 years of Warren Buffett’s letters to the shareholders of Berkshire Hathaway. Bank of America is an advertising partner of The Ascent, a Motley Fool company.
“When you are told that all repurchases are harmful to shareholders or to the country, or particularly beneficial to CEOs, you are listening to either an economic illiterate or a silver-tongued demagogue (characters that are not mutually exclusive),” he wrote. Berkshire is the largest shareholder in eight of the biggest companies in America— American Express, Bank of America, Chevron, Coca-Cola, HP Inc., Moody’s, Occidental Petroleum and Paramount Global—and some of them write big dividend checks. Even though Buffett is known for his consistency — he’s lived in the same house for 61 years — his changing tastes can be seen in his stock picks. In 2018, Buffett told CNBC’s Becky Quick that Berkshire Hathaway had sold all of its holdings in IBM and ramped up investments in Apple. When Treasury yields soared on the heels of the Federal Reserve’s steepest rate-hiking cycle in four decades, it sent 30-year mortgage rates to a 23-year high last October.
It was also short; the book was small with large print and still only ran a little more than 100 pages. Customers find the information in the book priceless, and the compilation great. Customer Reviews, including Product Star Ratings help customers to learn more about the product and decide whether it is the right product for them. However, with the Fed set to begin cutting interest rates, and mortgage rates declining, the luster for homebuilders and their suppliers may begin to wear off. The company’s new generative AI capabilities only work on iPhone 15 Pro, iPhone 15 Pro Max, and newer models.
Stephen Foley at FT Alphaville has a great breakdown of Buffett’s letter here, which serves a great curtain raiser ahead of the 50th annual Berkshire letter.
It is not designed to meet your personal financial situation – we are not investment advisors nor do we give personalized investment advice. The opinions expressed herein are those of the publisher and are subject to change without notice. It may become outdated an there is no obligation to update any such information.
In May 2023, Buffett said, “Apple is different than the other businesses we own. It just happens to be a better business.” That statement is seemingly at odds with the recent selling spree. CNBC estimates that Berkshire’s stake in Apple declined to 400 million shares in June 2024, a 55% reduction from 905 million shares https://forexarena.net/ in December 2023. Returning to Apple, even with those busy sell-offs, Berkshire still has a huge position in the company. If history is any indication, Buffett, who’s been known to spread out his sells across quarters, will continue shedding Apple until he and his team feel the position is sized appropriately.
Revenue rose 1.2% to $93.7 billion and operating earnings increased 16% to $11.6 billion. The shining star was the insurance segment, where operating earnings from underwriting and fixed-income investments climbed 56%. Berkshire Hathaway owns subsidiaries in a diverse range of industries, including insurance, railroads, energy, utilities, manufacturing, and retail. The core insurance business generates investable cash with which Warren Buffett has earned great returns.
That trend is problematic because China accounted for 19% of total revenue in fiscal 2023 (ended September 2023). In recent years, one of the most widely discussed aspects of his business has been its sizable stake in Apple (AAPL -0.01%). Whether the original purchase was made by Buffett or his understudies is unknown, but Buffett likely controlled the position as it grew in size over the years, and he is likely responsible for trimming the position in recent quarters. Warren Buffett is considered one of the greatest investors in American history due to his track record with Berkshire Hathaway (BRK.A 1.11%) (BRK.B 1.13%). Specifically, Berkshire stock has compounded at roughly 19.8% annually since Buffett took control of the company in 1965, nearly doubling the performance of the S&P 500.