News Summary

Berkshire Hathaway’s Q4 2024 portfolio adjustments reveal a cautious strategy as Warren Buffett’s firm sells major ETF positions and reduces stakes in key companies. With over $320 billion in cash reserves, Berkshire navigates a challenging market, maintaining significant investments in top holdings while exploring new opportunities, such as an increased stake in Domino’s Pizza. The firm’s latest moves reflect a prudent approach to investment amidst rising market valuations and potential Federal Reserve interest rate hikes.

Berkshire Hathaway Shows Caution with Q4 2024 Portfolio Tweaks

Warren Buffett’s investment firm, Berkshire Hathaway, recently filed its much-anticipated 13F statement for Q4 2024, and let’s just say it has stirred some interesting conversations in the investment community! The report, which details Berkshire’s stock holdings at the end of the quarter, revealed some notable adjustments that signal caution amidst a choppy market landscape.

Big Moves in ETFs

Berkshire made headlines by selling its entire positions in two major exchange-traded funds (ETFs)—the SPDR S&P 500 ETF (SPY) and the Vanguard S&P 500 ETF (VOO). This is significant since it’s the first time in about five years that the firm has exited positions in these ETFs, which were initially purchased back in late 2019. Specifically, Buffett’s team unloaded 39,400 shares of the SPY and 43,000 shares of the VOO. This shift certainly gives off a vibe of caution, doesn’t it?

Cash is King

Throughout the year, Berkshire has taken refuge in cash, amassing an impressive stash of over $320 billion in cash and short-term Treasury bills. Talk about a rainy day fund! In fact, in a pattern that seems to have become traditional, Buffett sold more stocks than he bought in 2024. The net selling surpassed purchases by a staggering $6 billion for the ninth consecutive quarter. It feels like it might be a strategy to weather the storm as valuations appear to be running high.

Shifting Stakes

Among the more remarkable events in the report is the reduction in holdings of Bank of America. Buffett sold off approximately 117 million shares, cutting its stake by 14.72% and dropping its ownership percentage from above 13% down to below 9%. The firm also trimmed its position in Citigroup, unloading a whopping 73.5% of its stake by selling close to 40.6 million shares. These moves reflect some serious recalibrations in Buffett’s investment philosophy.

Ups and Downs

This isn’t all doom and gloom, however! Berkshire also made some significant purchases. They increased their stake in Domino’s Pizza by an eye-catching 86.49%, bringing their total to 2,382,000 shares. They also entered a new position in Constellation Brands, acquiring over 5.6 million shares valued at about $1.24 billion. This new investment accounts for around 0.47% of the portfolio, suggesting Buffett still believes in picking some winners.

Furthermore, Berkshire made slight increases in investments in companies like Occidental Petroleum, raising its stake by 3.49%, and ramping up its position in Pool Corp with a robust 48% increase.

Focus on Top Holdings

As the portfolio has grown leaner, it still showcases some heavy-hitting names. Among the 39 stocks in Berkshire’s portfolio, the top three holdings include Apple Inc. (28.12%), American Express Co. (16.84%), and Coca-Cola Co. (9.32%). Notably, despite the cautious approach this quarter, Berkshire maintained its large position in Apple, holding a whopping 300 million shares. This alone constitutes nearly a quarter of the firm’s equity portfolio, which is valued at around $300 billion.

Navigating a Tricky Market

Warren Buffett and his team are clearly navigating a tricky market environment filled with high valuations and potential interest rate hikes looming from the Federal Reserve. There’s a prevailing sense that the landscape could shift, and Berkshire’s recent moves underscore a prudent approach to the investment strategy.

As we wrap up this look at Berkshire Hathaway’s latest adjustments, it’s clear that while the investment giant is making some bold moves, caution is the name of the game. The prospect of potential market turbulence has led to a strategy deeply rooted in observation, adaptation, and, yes—keeping that cash close!

Berkshire Hathaway Adjusts Portfolio Amid Market Caution