For decades, famed value investor Warren Buffett has insisted that he does not try to "time the market." But, his recent sales could serve as a warning sign for investors amid a period of protracted valuations.
What Happened: Buffett's Berkshire Hathaway Inc (NYSE:BRK) (NYSE:BRK) has gradually wound down its largest positions over the last year.
Berkshire slashed its largest position in Apple Inc (NASDAQ:AAPL) by over two-thirds since 2023. Buffett also sold much of his position in Bank of America Corp (NYSE:BAC) since the summer. He also trimmed back nearly all of his position in Ulta Beauty Inc (NASDAQ:ULTA), an atypically short holding period for the investor who preaches investing for the long term.
The Omaha, Nebraska-based company's cash horde now stands at an astounding $325 billion.
Why it Matters: Several market experts have struggled to comprehend Buffett's thought process — is he bearish on the market at large? Reallocating his portfolio away from Apple and Bank of America to diversify? Or, as Buffett hinted at in May, anticipating a future change to U.S. tax laws?
An article from Bloomberg columnist Nir Kaissar could fuel the first theory. A post on X relayed a graph from the article showing Buffett's cash pile conspicuously rising ahead of financial crises.
Interesting piece here from @markets and how Buffett's cash hoard often spikes before equity market slowdowns. pic.twitter.com/9aFmsMpP2N
— Cullen Roche (@cullenroche) November 21, 2024
The company's cash allocation ticked upwards ahead of two large market crashes in 2000 and 2008.
As companies in the SPDR S&P 500 ETF Trust (NYSE:SPY) sustain a period of high valuations, Buffett could simply be heeding his advice, "to be fearful when others are greedy and to be greedy only when others are fearful," allocating his portfolio away from what he deems riskier investments
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オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会（ASIC）の管理を受けております（AFSL No. 224663）。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。
The Omaha, Nebraska-based company's cash horde now stands at an astounding $325 billion.
ネブラスカ州オマハに本社を置くこの会社の現金準備高は、驚異的な3250億ドルに達しています。