Warren Buffett Sells Billions in Stocks Amid Election Uncertainty, Builds Record Cash Pile
Record Cash Holdings
In Berkshire Hathaway’s third-quarter earnings report, Buffett revealed that he has amassed a staggering $325 billion in cash, treasury bills, and other liquid investments. This is a marked increase from just under $110 billion two years ago. During the third quarter alone, from July through September, Buffett’s firm sold $36 billion worth of stocks while only making $1.5 billion in purchases, marking the eighth consecutive quarter of being a net seller.
This substantial cash reserve indicates Buffett’s wariness of current market valuations, as he seems eager to take some chips off the table in anticipation of potential market volatility leading up to the election.
Significant Stock Sales
Buffett’s recent moves include reducing his stakes in his two largest stock holdings: Apple and Bank of America. Between January and September, he cut his investment in Apple by 60%, reducing its value from approximately $174 billion to about $70 billion. Similarly, he decreased his stake in Bank of America by 23%, bringing its value to under $32 billion.
Buffett has long maintained that share buybacks only make financial sense when a stock trades below its intrinsic value. After repurchasing $20 billion in shares from early 2022 to the end of June, Buffett has not bought back a single share in the last quarter, suggesting he no longer views Berkshire’s stock as undervalued.
Market Reaction
The investment community is closely watching Buffett’s actions as he continues to offload stocks while sitting on a considerable cash pile. According to Russ Mold, Investment Director at AJ Bell, Buffett’s strategy sends a clear signal about market conditions. “When the world’s most famous living investor continues to sell shares and sits on a substantial pile of cash, it tells you something significant about the market situation,” Mold noted.
As the presidential election approaches, many investors are left pondering how best to navigate the uncertain market landscape. Buffett’s cautious stance and the decisions made by Berkshire Hathaway serve as a barometer for the broader investment climate, providing insights into one of the most respected minds in finance.
