Billionaire Warren Buffett just completed a year-long cycle of relentless selling at Berkshire Hathaway.
In the last 12 months, Buffett has sold a net total of more than $184 billion of the conglomerate holding company’s shares.
The legendary investor has steadily exited huge stakes in Apple (AAPL) and Bank of America (BAC), along with Capital One Financial (COF), Citigroup (C), Nu Holdings (NU), Nucor (NUE), DaVita (DVA), VeriSign (VRSN) and D.R. Horton (DHI).
Berkshire now has a record $381 billion in cash and short-term Treasury bills as of the latest SEC data from September 30th.
This isn’t the first time Buffett has steadily unloaded Berkshire’s exposure to the market.
His first notable pullback came in the late 1960s, when Buffett dissolved his investment partnership in 1969, returning cash to partners because he viewed the stock market as wildly overpriced amid speculative frenzy.
He issued a warning in a letter that year.
“I just don’t see anything available that gives any reasonable hope of delivering such a good year.”
The decision eventually paid off, when Buffett sidestepped the brutal 1973-1974 bear market, where the Dow Jones plunged 45%.
Buffett repeated the caution in the late 1990s during the dot-com bubble.
Berkshire avoided tech stocks entirely, holding massive cash reserves instead. By 1999, Buffett’s 1998 shareholder letter highlighted his reluctance to buy at inflated prices, stating markets offered few bargains.
This stance protected Berkshire as the Nasdaq crashed 78% from 2000 to 2002.
Another key example happened in 2005-2007, ahead of the great financial crisis.
Buffett sold off Berkshire’s stakes in petrochemicals and other cyclical sectors, citing high valuations. He also reduced exposure to consumer goods like Procter & Gamble (PG) after the Gillette acquisition, trimming positions as markets peaked.
Berkshire’s cash rose to $44 billion by 2007, positioning it to buy distressed assets during the 2008 meltdown.
In 2018-2019, Buffett again dialed back. Berkshire sold significant portions of IBM (IBM) and Oracle (ORCL) holdings shortly after buying them, admitting misjudgments on tech valuations.
He also trimmed airline stocks before the pandemic, but fully exited them in 2020 amid COVID-19 turmoil, locking in losses but freeing capital.
Although critics argue these moves sometimes miss major bull runs, there’s no doubt that Buffett’s long-term record shines.
Berkshire’s book value grew 18.3% annually all the way from 1965 to 2023.
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