Stocks Analysis by Christopher Hopf covering: Microsoft Corporation, Apple Inc, Amazon.com Inc, NVIDIA Corporation. Read Christopher Hopf's latest article on Investing.com
Warren Buffett has sold approximately 60 percent of his Apple shares. This revelation last week sent shockwaves through an already jittery financial market. Known as the Oracle of Omaha for his prescient market moves, Buffett’s drastic reduction of Berkshire Hathaway’s largest position seemed to underscore fears of an impending recession and escalating geopolitical tensions in the Middle East.
“Buffett seems to believe that publicly traded stocks are not offering attractive opportunities right now,” another analyst told Reuters. Thanks to these sales, Berkshire Hathaway now holds nearly $280 billion in cash—the largest cash reserve in the company’s history. Many market observers suspect this may be a strategic move to safeguard against a significant market downturn.“We’d love to invest it all, but we won’t spend it until we find an opportunity that promises low risk and high returns.
While in absolute terms, the cash reserves are at an all-time high, this is relative to Berkshire’s market capitalization. The cash to market value ratio is currently just above 30 percent—a peak not seen since 2020. “Right now, it’s slightly above the long-term average of 25 percent. It’s elevated but not a signal that Warren Buffett is preparing for the apocalypse,” Brown concluded. “What we’re seeing, isn’t Buffett hiding in a bunker preparing for the end of the world.
These sales represent only a fraction of Bezos’s, Zuckerberg’s, or Huang’s respective holdings and were communicated to investors months in advance. Moreover, all these transactions occurred during extremely bullish market phases when Nvidia, Amazon, and Meta stocks were near their all-time highs. At that time, no one panicked because the market continued to rise.
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