Queue the bears.
Berkshire Hathaway’s (BRK-A, BRK-B) cash flow hit a new record of $189 billion in the first quarter, the industrial giant announced in its earnings release Saturday.
This massive war chest will likely reach $200 billion by the end of the current quarter, Buffett told shareholders at a packed CHI Health Center today.
Such a hoard of greenbacks indicates that Buffett is currently “bearish” on the stock market, according to one seasoned value investor.
“Buffett is bearish on the stock market. He’s showing it by increasing his massive treasury to $200 billion, selling Apple (AAPL) stock and saying he doesn’t see any good deals,” Bill Smead, CIO of Smead Capital Management and observer, told me Buffett’s long-time stand on the grounds of Woodstock. of capitalism.
Berkshire’s decision to reduce its stake in Apple and increase the company’s cash flow is a move that Buffett says makes sense given the current macroeconomic environment.
“I don’t think anyone sitting at this table knows how to use it effectively, and therefore we don’t use it,” Buffett said in response to a shareholder question asking why Berkshire isn’t leveraging the cash reserve. .
“As the world becomes more sophisticated, complicated and intertwined, more problems can occur” and you want to be able to “act when that happens,” Buffett added.
Apple and these other Buffett stocks
The bears have meat to feast on, compliments of Buffett.
Berkshire reduced its position in Apple by about 13% in the first three months of the year, marking the second straight quarter the conglomerate has reduced its stake in the iPhone maker.
As of March 31, Apple accounted for about 40% of Berkshire’s vast stock portfolio, worth a total of $135.4 billion.
Berkshire reduced its position in Apple as the tech giant has struggled in recent quarters and the stock’s valuation remains high. The stock fell about 10% in the first three months of the year, weighing on Berkshire’s quarterly results.
While some initially viewed Buffett’s decision to reduce Apple’s stake as a sign that his stance on the tech beast had changed, one analyst told Yahoo Finance that “taking a little height off it doesn’t hurt.”
“It doesn’t really concern us because Apple had a very large position in the 13-F portfolio at the end of 2023, so anything that could reduce that exposure is good from a diversification standpoint,” Greggory told me. Morningstar analyst Warren at Morningstar press conference. meeting.
The legendary investor was quick to reassure shareholders of his confidence in Apple.
“At the end of the year, I think it’s extremely likely that Apple will be the largest portfolio of common stocks that we have right now,” Buffett told a packed audience that included Apple’s CEO. ‘Apple, Tim Cook.
