One titan in the investing realm has long held the ability to sway Wall Street like nobody else – none other than Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) leader Warren Buffett. Since seizing control in 1965, the “Oracle of Omaha” has deftly outperformed the S&P 500, amassing an exceptional total return that has left the market awestruck. As of August 7’s closing, Berkshire’s Class A shares (BRK.A) have skyrocketed an incredible 5,174,441% under Buffett’s tenure.
Investors eagerly await insights into the buys and sells made by Buffett and his team, knowing well that his moves carry weight within the market.
Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
Eager eyes turn to the quarterly 13F filing submitted by Berkshire to the SEC. This document, set to emerge post-closing on August 14, serves as a peek behind the curtain, revealing the strategic moves of Wall Street’s elite financiers. Yet, clues about Buffett’s activities can often be gleaned beforehand, through the organization’s operating results, annual meetings, and SEC Form 4 filings.
Drawing from this mosaic of clues, it seems likely that Buffett is poised to shed light on two additional equity sales that have flown under Wall Street’s radar.
Decoding Buffett’s Equities Exodus
One notably large-scale divestment that Buffett has publicly discussed is the reduction in Berkshire’s major stake in tech giant Apple (NASDAQ: AAPL). Insights from fair value estimations on Apple in Berkshire’s Q2 results imply a substantial sell-off of nearly half of the 789.37 million shares held as of March 31.
During the annual shareholder event in May, Buffett hinted at a future rise in corporate tax rates. With substantial unrealized capital gains in Apple’s holding, Buffett and team opted to lock in profits, anticipating future tax hikes that could dent returns.
Another notable revelation, unveiled during the shareholder gathering, was the complete dissolution of Berkshire’s remaining stake in legacy media entity Paramount Global (NASDAQ: PARA). The multimedia player, grappling with emerging challenges from streaming platforms and escalating content development costs, became a casualty of Berkshire’s strategic shift.
Additional illuminations from Form 4 disclosures spotlight ongoing share sell-offs in Buffett’s second-largest position, Bank of America (NYSE: BAC). The consecutive divestitures over multiple trading days, totaling billions in sales, reflect a corrective measure against a frothy stock market backdrop.
Since October 2022, Buffett has netted a hefty $131.6 billion from equity sales, outweighing his acquisitions over the same period.
Image source: Getty Images.
Insights Into Forthcoming Moves
With Berkshire’s Q2 13F disclosure on the horizon, all cards are primed to be laid out, showcasing the full array of maneuvers executed during the quarter. Yet, a hint within the Q2 operating results suggests further undisclosed trades. The cost basis falloff in the “Commercial, industrial, and other” sector unveils a trail of undisclosed trades, offering a peek into Buffett’s veiled machinations.