Berkshire Hathaway Significantly Reduces Stock Holdings

Berkshire Hathaway has downsized its stock portfolio, selling holdings in GM, HP, and Chevron, and raising its cash reserves to a record $157 billion.

Warren Buffet liquidates billions of dollars of his investments. Does he know something?

In a notable shift, Warren Buffett's Berkshire Hathaway made significant divestments in its stock portfolio during the third quarter. The conglomerate offloaded its entire stake in General Motors, valued at approximately $850 million. Additionally, it trimmed positions in other key holdings: A 15% reduction in HP, leading to a decline in holdings of over $1 billion, and a 10% cut for Chevron stocks.

Broader Portfolio Adjustments

Berkshire's adjustments extended beyond these prominent names. It also exited smaller stakes in UPS, Johnson & Johnson, and Procter & Gamble, each valued at around $50 million. Notably, independent Berkshire asset manager New England Asset Management maintained holdings in the latter two. The cuts continued with sales in Amazon, Mondelez International, Markel, and Globe Life. A significant move was closing out the position in Activision Blizzard, ending a merger arbitrage bet linked to its acquisition by Microsoft, which concluded in early October.

Cash And Treasury Bill Focus

This strategic selling spree has escalated Berkshire's divestments in publicly-traded stocks to nearly $40 billion over the past year. This pivot aligns with Buffett's preference for short-term Treasury bills, which are currently offering over 5% yield. Consequently, Berkshire's cash reserves swelled to a record $157 billion by September's end, supported by high interest from its cash and Treasury holdings and robust earnings from its diverse business operations.

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The sales, adding to his vast cash pile, suggest that Buffett and his asset management firm may be expecting buying opportunities in the coming months.

Confidential Investments

Intriguingly, Berkshire's report omitted details on at least one investment, requesting confidential treatment from the Securities and Exchange Commission. This practice is common for Berkshire when undertaking significant new investments.

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