Not really if his selling is what explains some of the price drop - he unloaded a lot of shares not to mention whoever caught wind of the move probably started selling too.
OT: Stock and Investment Talk
- Thread starter RU-05
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Well if he doesn't time it, then we can't criticize him for timing it poorly.
Berkshire has held AAPL for quite a bit of time and has profited immensely. It’s not as if he was in and out of the stock.
These are massive positions and not something you can get in and out of on a dime.
Buffet is not like most money managers though. Not big into diversification.
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Here's another article, does this sound like someone who has mistimed anything lol.
From the article
Then, in 2016, Buffett's company, Berkshire Hathaway, started investing in Apple when it purchased $1 billion worth of the company's shares. By 2017, that amount would grow to over $28 billion. All told Berkshire has spent $40 billion on its stake in Apple. Since then, the company's stock price has increased by roughly 800 percent.
On Saturday, in a filing with the SEC, Buffett revealed that he had dumped almost half of his Apple stock, netting $76 billion. Earlier this year, the company sold a smaller number of shares, bringing the total sold this year to more than 500 million shares, representing 56 percent of Berkshire's total stake in Apple.
On the surface, it's kind of remarkable that--despite waiting so long to buy into the tech company--Buffett's timing has paid off so well. Apple has made him a lot of money. That, it turns out is a pretty important piece of understanding what's happening.
Right now, Apple is again the most valuable company in the world. It's also the most valuable it has ever been, with a total market cap of $3.3 trillion making it the largest holding for Berkshire Hathaway, even after the sale.
That timing thing is pretty important because even though Buffett didn't specifically say why he's unloading Apple's stock, he has indicated in the past that he plans to hold onto the company's shares "unless something really extraordinary happens." It would seem reasonable to ask why Buffett decided to make such a large sale now. Well, is there a better time to sell a stock than when it's at its all-time high?
I think @RUAldo makes a good point that Berkshire selling helped push the stock down to those 52 weeks lows.
And I'm sure that volume of selling led to others selling.
Does this suggest the changing of the guard from Buffett? Who always says that rebalancing and diversification is for losers.
By the way, what happens to BRK when Buffett joins Charlie in the great market in the sky? It will be interesting to see how the stock reacts.
Berkshire is plenty diversified and across many industries. The biggest difference is they own or have owned many companies outright and again across multiple industries. It's not just stock holdings.
But selling in the 190s to push it down to the 170s.....only to see it launch into the 230s a short time later.
IMO that could be a time to purchase if it drops, assuming you think the new leadership is capable.
I own a bunch of BRK via funds/etfs, but have been looking for a nice entry point for my personal account. Missed out last fall when it dipped into the low 300.
Over the past 15 years, Gross has been as bad as Cramer. Many better people to take advice from.
Bill Gross says don’t buy the dip as stocks crash while Warren Buffett’s moves hint at ‘sell signal’
"Investors should stop talking about buying the dip and start asking about selling recoveries."finance.yahoo.com
My guess is the algos went crazy after the quick drop to $170 which pumped the stock back up and beyond and the momentum carried it to $230. Nobody talks about it enough but the algos are BS. Years ago I interviewed with a company that installs high speed dedicated circuits to hedge funds in NY and CT that would allow them to shave milliseconds off trades. Couple that with the algos and retail is getting screwed.
Yet Apple was 50% of their portfolio.
Both in actions and words Buffet was not one to advocate for diversification.
If anyone is that concerned about it, just buy and hold the S&P and the QQQ's.
If you want to play the game, then you have to accept how the game is played.
Methinks a potential/expected corporate tax increase ultimately was the tipping point for Berkshire selling half of its AAPL position. Now comes the question of what to do with its $280B in cash.
I don't think the corporate rates expire on 12/31/25. Awfully big move with the possibility to filibuster rate hike legislation. Corporate rate on qualified dividends is actually lower than cap gains so I think the move might be to invest in securities that offer a combination of appreciation and dividends.
I think that’s been the case for quite awhile. They even try to get their servers or whatever as close as possible to the physical location to improve fractions of a second speed in execution.
I don’t think it started at that weighting. It grew into that weighting and also he often sits on a ton of cash which many money managers aren’t allowed to or don’t do. So it’s not the same but the company itself is fairly diversified.
If anything more than AAPL, insurance exposure is something that can be a somewhat of a risk but I don’t think they’ve had much issue with it over the years.
I’ve said the same in posts here. There’s insider trading and other things that go on too that never result in punishment etc..but that’s reality. I just accept it and move on.
Over the long run, the pros and cons of algorithms wash out (i.e., you get as many nonsensical ups as you get downs).
It definitely did not start at that weighting, but most managers would trim as that position grew so as to reduce the one stock risk.
Yea I agree but Berkshire is still a very diversified company through its stock holdings and the companies that it outright owns.
The economy is doing fine. This temporary silliness will likely turn around in stunning fashion. Lots of Fed speakers this week. Earning season above expectations. Buy the dip.
I have some buy orders in. Good thing I have cash on the sideline. Feels like I missed my chance on fixed income.
There is also chatter about the unwind of yen “carry trade” adding fuel to the global market decline after the Bank of Japan raised interest rates last week. The yen is rising in value vs. the U.S. dollar, ending a practice of traders borrowing in the cheap currency to buy other global assets.
“It’s painful,” said Victoria Greene, chief investment officer at G Squared Private Wealth on CNBC’s “Worldwide Exchange.” “I think there’s a lot being absorbed that happened over the weekend between Berkshire cutting Apple...you had the Japan sell-off... you have the yen spike and the end of that carry trade...You have a lot of bad news getting priced in.”
“This is a pullback, a correction,” she added. “We’ll probably hit oversold at some point...rather quickly at these levels.”
Algos are on full display. Japan second worst in history other than 1987?!?! Should be a fun day. This is a good test for crypto. If a massive BTC/crypto selloff ensues it’s going to create a lot of problems that I don’t think we have seen before.
Moves happen much faster with algorithmic trading and such and honestly the larger numbers don't phase me so much these days, especially taken as a percentage. On some level the speed of the drops can be "surprising" but in another way I see it as clearing the decks faster.
S&P just coming up on correction territory. Before August, 8 out of the last 9 months have been green with a 30% move up to the highs. Market has been overbought even on longer term charts. I think there's some support in the low 500s and then after that some stiffer support in the 470s which would be about a 17% move down if it got that far.
VIX trading above 50 is unprecedented for current market conditions. Historically when the VIX hit this level there were tangible global issues that weren’t a secret. Outside of Iran and Israel coming to blows there isn’t anything that tangible to explain this, and most experts agree the Israeli conflict likely isn’t going to spread out of control.
The job report doesn’t cause a sell off like this, and an extra quarter of interest rates remaining steady shouldn’t break a market that was at ATHs a month ago.
The job report doesn’t cause a sell off like this, and an extra quarter of interest rates remaining steady shouldn’t break a market that was at ATHs a month ago.
More on INTC and I kind of agree with it and its part of the reason for my interest (the massive drop gave the spark) in it despite how pathetic its been. If the government is really backing you and has a vested interest in you, how far can you fall and fail?
One issue though is that foreign manufacturers are also starting US production so how much of a kink does that put into American based INTC. Does being an American based company still have importance, as long as production from whomever takes place in the US.
From the article:
Those issues seem reason enough to cause deep investor consternation, but perhaps Intel’s stock decline would’ve been even worse if not for a key factor the company has working in its favor: Investors may have a sense that the company will be safe in the end despite its challenges, thanks to Intel’s standing as a domestic chip manufacturer at a time when governments are interested in propping up local players in the chip market.
“In other circumstances we believe we would now be having ‘going concern’ conversations with clients,” Bernstein’s Stacy Rasgon wrote in a note to clients. “To that end (and perhaps the one positive), subsidies and partner contributions, when combined with spending cuts and dividend suspension look set to add ~$40 billion of incremental cash to the company’s balance sheet through the end of 2025, suggesting Intel will survive (in some form) to continue the fight.”
Intel sits in an especially important spot for the U.S. because the company manufactures chips itself. “Our country and [government] cannot afford to let [Intel] founder and really struggle long term,” Mizuho desk-based analyst Jordan Klein said in a note to clients.
But Intel stands out. The U.S. government “has a vested interest in [Intel] being a real player in foundry and winning at the leading edge,” Klein wrote. Intel is “too important of a long-term strategic asset.”
though Intel’s stock escaped that session unscathed, demonstrating how investors view the company as one that could benefit if nationalism comes to play more of a role in the industry.
Intel’s conundrum draws parallels to that of Boeing Co., another domestic titan besieged by execution issues that have pressured financials. But while Boeing isn’t a major financial institution like the too-big-to-fail banks, the company operates as the domestic half of a duopoly with Airbus, and it occupies a key position in the defense and aerospace markets.
Boeing is an iconic business and major employer, and the U.S. government likely has a vested interest in its success, as well as Intel’s.
One issue though is that foreign manufacturers are also starting US production so how much of a kink does that put into American based INTC. Does being an American based company still have importance, as long as production from whomever takes place in the US.
From the article:
Those issues seem reason enough to cause deep investor consternation, but perhaps Intel’s stock decline would’ve been even worse if not for a key factor the company has working in its favor: Investors may have a sense that the company will be safe in the end despite its challenges, thanks to Intel’s standing as a domestic chip manufacturer at a time when governments are interested in propping up local players in the chip market.
“In other circumstances we believe we would now be having ‘going concern’ conversations with clients,” Bernstein’s Stacy Rasgon wrote in a note to clients. “To that end (and perhaps the one positive), subsidies and partner contributions, when combined with spending cuts and dividend suspension look set to add ~$40 billion of incremental cash to the company’s balance sheet through the end of 2025, suggesting Intel will survive (in some form) to continue the fight.”
Intel sits in an especially important spot for the U.S. because the company manufactures chips itself. “Our country and [government] cannot afford to let [Intel] founder and really struggle long term,” Mizuho desk-based analyst Jordan Klein said in a note to clients.
But Intel stands out. The U.S. government “has a vested interest in [Intel] being a real player in foundry and winning at the leading edge,” Klein wrote. Intel is “too important of a long-term strategic asset.”
though Intel’s stock escaped that session unscathed, demonstrating how investors view the company as one that could benefit if nationalism comes to play more of a role in the industry.
Intel’s conundrum draws parallels to that of Boeing Co., another domestic titan besieged by execution issues that have pressured financials. But while Boeing isn’t a major financial institution like the too-big-to-fail banks, the company operates as the domestic half of a duopoly with Airbus, and it occupies a key position in the defense and aerospace markets.
Boeing is an iconic business and major employer, and the U.S. government likely has a vested interest in its success, as well as Intel’s.
For me, it's harder to find opportunities when everything is going up. I don't tend to jump on momentum. It's against my psychology which distills down to the most basic "buy low sell high" mantra. There are more potential opportunities when things are coming down but you have to have cash on the sideline as you mentioned. I always do whether the market is going to the moon or sinking to the Titanic. Having it is my psychological safety net.
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