With the sale of Apple and Bank of America, Berkshire Hathaway is building a large cash reserve for future investment opportunities.
The legendary investor Warren Buffett lost a significant sum of approximately US$40 billion in potential profits after selling large amounts of assets of Berkshire Hathaway in advance in 2024.
According to a recent Barron’s report, Buffett made a significant reduction in the firm’s positions, selling around US$127 billion in assets so far this year. Among these sales, the divestment of approximately US$100,000 million in Apple shares and US$10,000 million in Bank of America stock.
The sale of Apple came at a cost
The sale of Apple stock It was one of Buffett’s most notable trades this year, but also one of his most expensive. By getting rid of these shares, Berkshire left about $20 billion in potential profits on the table. Apple, being one of the key assets in Berkshire’s portfolio, demonstrated solid performance in the market, highlighting the impact of this early sale on the firm’s finances.
In addition to Apple, Buffett and his team at Berkshire also made significant sales in the US banking sector, a strategy that has been in progress for years. This exit includes the sale of shares in large banks such as JPMorgan Chase, Wells Fargo, Goldman Sachs and, most recently, Bank of America. Altogether, this decision cost Berkshire approximately $20 billion in potential profits, showing a considerable loss of opportunity in one of the economy’s key sectors.
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Buffett prepares for future opportunities
Despite these early sales decisions, Warren Buffett accumulated a record $31 billion in cash in Berkshire Hathaway’s coffers. This cash reserve gives the firm a great investment capacity to take advantage of future opportunities in the market, in case the conditions are attractive to the 94-year-old veteran investor. This “financial ammunition” allows Berkshire to remain in a strong position, patiently waiting for the right moment to strategically re-enter the market.
How Warren Buffett’s portfolio looked at the end of the third quarter
After the quarterly movements, the majority of Berkshire Hathaway’s investment portfolio was composed as follows:
- Apple: US$69.9 billion (25.7%).
- American Express: US$41.1 billion (15.1%).
- Bank of America: US$31.7 billion (11.7%).
- Coca-cola: US$28.7 billion (10.6%).
- Chevron: US$17.5 billion (6.4%).
On the other hand, the corporation announced that it registered in the period revenues of US$92,995 million and an operating profit of US$10,090 million. Meanwhile, net profit was US$12.18 per Class B share and US$18,272 per Class A share.
Source: Ambito
I am an author and journalist who has worked in the entertainment industry for over a decade. I currently work as a news editor at a major news website, and my focus is on covering the latest trends in entertainment. I also write occasional pieces for other outlets, and have authored two books about the entertainment industry.
