If you want to invest like Warren Buffett, look no further than his recent portfolio adjustments.
Berkshire Hathaway’s latest 13F filing and third quarter results revealed something noteworthy: The famed investor is selling more assets than he is buying, and given his impressive track record, retail investors should take heed.
“The message is be cautious … I think he sees trouble next year,” Portfolio Wealth's Lee Munson told Yahoo Finance Live.
Munson added: “He doesn’t see any screaming deals … It’s hard to find good companies at a reasonable valuation.”
Since Jan. 1, Buffett has sold about $23.6 billion worth of equities after purchases, making him a net stock seller for the year. That’s in stark contrast to his portfolio adjustments in 2022, when he was a net buyer.
Berkshire ended the third quarter with a record $157.2 billion in cash, up from $147.4 billion the prior quarter.
Morningstar analyst Greggory Warren told Yahoo Finance that Buffett’s recent decisions are a reflection of his steadfast "patience," something the Oracle of Omaha himself has emphasized is key to successful investing.
“Discipline has kept Berkshire from making huge mistakes,” Warren said. “Their cash balance is where it is now because they haven't made a lot of dumb decisions over time.”
Warren attributes Berkshire’s selling in the third quarter to "cleaning out the remnants" of some of the insurer’s legacy holdings.
Berkshire Hathaway exited positions in General Motors (GM), Procter & Gamble (PG), and Johnson & Johnson (JNJ), among others, during the third quarter, while reducing holdings in HP (HPQ), Amazon (AMZN), and Chevron (CVX).
The firm’s stake in its top position Apple (AAPL), which now accounts for half of Berkshire’s stock portfolio, remained unchanged. With the exception of Chevron, that was the case for Buffett's other top holdings as well.
It’s an investment strategy that signals unwavering confidence in his top stocks, according to one analyst.
“Buffett sees black clouds with GM and others while Apple has blue skies ahead,” Wedbush senior equity analyst Dan Ives told Yahoo Finance. “This is the beginning of the next phase of the Cupertino growth story and Buffett knows that … Selling Apple here would be like leaving a Taylor Swift concert after the first song.”
For Swifties out there, enough said.
If you're investing like Warren Buffett, chances are you've performed largely in line with the broader S&P index this year. Berkshire shares, both Class A (BRK-A) and Class B (BRK-B), are up about 16% since Jan. 1, compared to the S&P 500’s (^GSPC) 17.5% gain.