Wednesday, August 7, 2024

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)

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

(Dreamstime)

https://www.newsmax.com/finance/streettalk/warren-buffett-apple-berkshire-hathaway/2024/08/05/id/1175285/

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

https://thesteadydrip.blogspot.com/2015/08/chinese-crash-crushes-stock-market-as.html

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