5 Reasons Why Warren Buffett Sold Half His Apple Stock (Connecting the Dots: Warren Buffett, Apple, China, New York Stock Exchange, Nasdaq Inc & Soros Funding, All Networking)
Newsmax.com
By
Lee Barney | Monday, 05 August 2024 12:00 PM EDT
Warren Buffett, the Oracle of Omaha, may be souring on
the prospects for Apple (AAPL) and
technology stocks,
traders tell Newsmax. Others, however, think he may have just been taking
profits off the table and looking to diversify Berkshire Hathaway’s portfolio.
The
big news in Berkshire’s second quarter financial report Saturday was a nearly
50% reduction in the size of the investment firm’s Apple stake to about 400
million shares. Some traders also sounded concerns that with this sale,
Berkshire’s cash stockpile rose to $277 billion as of June 30, up significantly
from $88 billion on March 31.
1.)
Apple Headwinds
Apple
has been facing slower revenue growth and a high valuation compared to other
tech giants and, like other U.S. companies heavily dependent on China, is getting
hammered by an economic slowdown there.
“The
single most important decision in evaluating a business is pricing power,” says
Stephen McBride, chief analyst at RiskHedge. “Buffett knows the trend of Apple
squeezing more revenue growth by hiking the price of iPhones is near the end.
Will people really pay one month’s rent for the latest iPhone?”
Apple
revenues “have barely grown in two years,” McBride says.
Nigel
Green, CEO of deVere Group, adds: “Tech is trading high, but Buffett buys what
he understands and sells what he doesn’t. He doesn’t ‘get’ AI (artificial
intelligence).”
2.)
Taking Profits
Stocks
are trading at an average price-to-equity ratio of 21, above the 20-year moving
P/E average of 16, according to FactSet.
“I
would be getting a little worried,” says Jim Shanahan, an Edward Jones analyst
who has a Hold rating on the stock. “Warren Buffett is reporting some massive
sales that have continued into the third quarter.”
McBride,
on the other hand, thinks Buffett may just be taking some profits off the
table.
“Buffett
is up 900% on his original investments in Apple,” McBride notes. “It’s his
biggest winner ever in dollar terms. Buffett is simply taking some risk off the
table. Nobody ever went broke taking profits.”
3.)
Market Conditions Weakening
Traders
point out that Berkshire was a buyer of just $1.6 billion of stocks in the
second quarter and that Buffett says he’s finding it challenging to spot fairly
priced investments.
As
Buffett put it himself at Berkshire’s annual meeting in May: “We’d love to
spend it (cash), but we won’t spend it unless we think we’re doing something
that has very little risk and can make us a lot of money.”
Reading
further into this, Green says, “It’s also likely Buffett believes a recession
is on the horizon — meaning people will be spending less on nonessentials; that
the Chinese market is slow, and the country is becoming increasingly
isolationist, especially in terms of tech.”
4.)
Tax Optimization
With
corporate taxes currently at an historically low 21%, it is possible that the
Berkshire CEO and chair simply wants to realize gains before potential future
increase in the tax rate. The Biden administration has proposed raising the
corporate tax rate to 28%.
5.)
Diversification
Apple
has contributed an increasingly higher portion of Berkshire’s portfolio
returns. Reducing the stake helps diversify the firm's investments and risk of
having too much capital tied up in a single company.
“Apple
had become a giant part of Berkshire’s portfolio,” McBride says. “It could have
become a ‘tail-wagging-the-dog’ scenario.”
Still,
even after unloading the Apple stock, at $84 billion of Berkshire’s portfolio,
it’s still Berkshire’s largest holding, representing 47% of its total stock
holdings.
As
Green puts it, “Yes, Buffett sold 50% of AAPL, but he kept 50%, too.”
Connecting
the Dots:
Warren E. Buffett is the chairman
& CEO for Berkshire Hathaway Inc., a life trustee at the Urban
Institute (think tank) and an adviser at the Nuclear Threat
Initiative (think tank).
Carnegie Endowment for International Peace (think
tank) was a funder for the Nuclear Threat Initiative (think
tank).
Jon M. Huntsman Jr. is a trustee
at the Carnegie Endowment for International Peace (think tank) and
an ambassador to China for the Barack Obama
administration.
J. Stapleton Roy is a trustee
at the Carnegie Endowment for International Peace (think tank) and
was a U.S. ambassador for China.
Richard
A. Debs was
a trustee at the Carnegie Endowment for International Peace (think
tank) and a chairman for the New York Stock
Exchange.
William
H. Donaldson was
a chairman & CEO for the New York Stock Exchange and a trustee
at the Carnegie Endowment for International Peace (think tank).
Foundation to Promote Open Society was a funder for
the Urban Institute (think tank), the Carnegie
Endowment for International Peace (think tank) and the New America
Foundation (think tank).
George Soros was the chairman
for the Foundation to Promote Open Society.
Eric
E. Schmidt is the Chairman of the New America Foundation
(think tank), was a funder for the New America Foundation
(think tank) and a director at Apple Inc.
Laurene Powell
Jobs was a director at the New America Foundation and
married to Steve Jobs.
Steve Jobs was
married to Laurene Powell Jobs and the co-founder &
Chairman for Apple Inc.
Apple Inc. was
a funder for the Center for American Progress.
Open Society Foundations was a funder for
the Center for American Progress.
George Soros is the founder
& chairman for the Open Society Foundations, was the chairman
for the Foundation to Promote Open Society and a supporter for
the Center for American Progress.
Foundation to Promote Open Society was a funder for
the Center for American Progress.
Madeleine K.
Albright was a director at the Center for American Progress and
a director at the New York Stock Exchange.
Richard A. Debs was
a chairman for the New York Stock Exchange and a trustee at
the Carnegie Endowment for International Peace (think tank).
William H.
Donaldson was a chairman & CEO for the New York Stock
Exchange and a trustee at the Carnegie Endowment for International
Peace (think tank).
Foundation to Promote Open Society was a funder
for the Carnegie Endowment for International Peace (think tank).
George Soros was the chairman for
the Foundation to Promote Open Society.
Carnegie
Endowment for International Peace (think tank) was a
funder for the Nuclear Threat Initiative (think tank).
Warren E. Buffett is
an adviser at the Nuclear Threat Initiative (think tank), the
chairman & CEO for Berkshire Hathaway Inc. and a life trustee
at the Urban Institute (think tank).
Foundation to Promote Open Society was a funder for the Urban
Institute (think tank) and the Brookings Institution (think tank).
George Soros was the chairman
for the Foundation to Promote Open Society.
Lawrence H.
Summers was a trustee at the Brookings
Institution (think tank), the National Economic Council chairman for
the Barack Obama administration and a consultant for Nasdaq
Inc.
Glenn H. Hutchins is
a trustee at the Brookings Institution (think tank) and a director
at Nasdaq Inc.
Vernon
E. Jordan Jr. is an honorary trustee at the Brookings
Institution (think tank) and a senior counsel at Akin, Gump,
Strauss, Hauer & Feld, LLP.
Akin,
Gump, Strauss, Hauer & Feld, LLP was the lobby firm for Nasdaq
Inc.
NASDAQ
Stock Market Inc. is the former name of Nasdaq Inc.
Deborah L.
Wince-Smith was a director at the NASDAQ Stock Market Inc.,
a director at Nasdaq Inc., and is a member of the Belizean
Grove.
Merit E. Janow is
a member of the Belizean Grove and was a director at the NASDAQ
Stock Market Inc.
Belizean_Grove is
the equivalent to the male-only social group, the Bohemian Club.
Henry
A. Kissinger was a member of the Bohemian Club and was
a lifetime trustee at the Aspen Institute (think tank).
John J. Phelan Jr. was
a lifetime trustee at the Aspen Institute (think tank) and a
chairman & CEO for the New York Stock Exchange.
Foundation to Promote Open Society was a funder
for the Aspen Institute (think tank).
George Soros was the chairman
for the Foundation to Promote Open Society.
Henrietta
Holsman Fore is a trustee at the Aspen
Institute (think tank) and a member of the Belizean Grove.
Walter Isaacson
is the president & CEO for the Aspen Institute (think tank) and
was the chairman & CEO for CNN.
Ted Turner is
the founder of CNN and a co-chairman for the Nuclear Threat
Initiative (think tank).
Carnegie
Endowment for International Peace (think tank) was a
funder for the Nuclear Threat Initiative (think tank).
Warren E. Buffett is
an adviser at the Nuclear Threat Initiative (think tank), the
chairman & CEO for Berkshire Hathaway Inc. and a life trustee
at the Urban Institute (think tank).
Foundation to Promote Open Society was a funder for the Carnegie
Endowment for International Peace (think tank), the Urban Institute
(think tank) and the Brookings Institution (think tank).
George Soros was the chairman for
the Foundation to Promote Open Society.
Vernon E. Jordan
Jr. is a life trustee at the Urban Institute (think tank), an
honorary trustee at the Brookings Institution (think tank) and a
senior counsel for Akin, Gump, Strauss, Hauer & Feld, LLP.
Akin,
Gump, Strauss, Hauer & Feld, LLP was the lobby firm for Nasdaq
Inc.
Resources:
Past Research
Chinese
Crash Crushes Stock Market as Obama Imitates Chinese Economy (Past Research on the New York Stock Exchange)
Monday,
August 24, 2015
https://thesteadydrip.blogspot.com/2015/08/chinese-crash-crushes-stock-market-as.html
Smaller
Bites – Connecting the Dots: Warren Buffett, Apple & Soros Funding (Past Research for Warren Buffett & Apple)
Tuesday,
May 9, 2023
https://thesteadydrip.blogspot.com/2023/05/smaller-bites-connecting-dots-warren.html
Coca-Cola
Quietly Removes Black Lives Matter Support Amid Criticism From Ted Cruz
(Connecting the Dots: Coca-Cola, Amazon, Apple, BlackRock & Bank of
America, UN, Hamas, Palestine, CNN & Soros Funding, All Networking) (Past Research on Apple)
Sunday,
October 22, 2023
https://thesteadydrip.blogspot.com/2023/10/coca-cola-quietly-removes-black-lives.html
Report:
Hunter Biden Has Joined Dad's WH Meetings (Connecting the Dots: Hunter Biden,
Joe Biden, Kamala Harris, The Truman National Security Project, The Whitehouse
Project, Smithsonian Institution, Russia, China, Ukraine & Soros Funding,
All Networking) (Past Research on Madeleine K.
Albright).
Thursday,
July 4, 2024
https://thesteadydrip.blogspot.com/2024/07/report-hunter-biden-has-joined-dads-wh.html
Donald
Trump: People Should Sue ABC for Stock Market Crash Triggered by Fake News (Past Research on the Nasdaq Inc)
Monday,
December 4, 2017
https://thesteadydrip.blogspot.com/2017/12/donald-trump-people-should-sue-abc-for.html
Charleston:
CNN’s Sick Pattern of Using the Dead as Political Weapons Against the Right (Past Research on CNN)
Saturday,
June 20, 2015
https://thesteadydrip.blogspot.com/2015/06/charleston-cnns-sick-pattern-of-using.html
ObamaCare
architect: I regret 'stupidity' of voter comment (Past
Research on the Urban Institute)
WEDNESDAY,
NOVEMBER 12, 2014
https://thesteadydrip.blogspot.com/2014/11/obamacare-architect-i-regret-stupidity.html
Chinese
Crash Crushes Stock Market as Obama Imitates Chinese Economy (Past Research on China)
Monday,
August 24, 2015
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