Warren Buffett, despite being 93 years old, is still regarded as at least one of, if not the, best investors in the world. As such, investors all around the world like to keep close tabs on which stocks Buffett, through his company Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B), has been buying and selling.
Luckily for those investors, Buffett's latest moves, covering the second quarter of 2023 (the three months to 30 June), have recently become public knowledge.
Our Fool colleagues in the United States have already revealed the stocks that Buffett added to and sold out of. Let's discuss them, and what ASX investors can learn from these moves.
Which shares has Berkshire Hathaway been buying and selling?
Over the quarter just gone, Berkshire bought additional shares in a total of five companies. Three of these were new buys for Berkshire, while two were additions to existing positions. The three new positions that Warren Buffett bought shares in were:
- D.R. Horton (new shares worth US$734 million)
- NVR (US$68 million)
- Lennar (US$17 million)
And the two positions that Berkshire added to were:
- Occidental Petroleum (US$818 million)
- Capital One Financial (US$281 million)
Meanwhile, Berkshire sold down or closed out of seven other stocks, in numbers that far exceed the company's buying activity.
Buffett sold down the following companies without closing out Berkshire's position completely:
- Chevron (sold shares worth US$1.52 billion)
- Activision Blizzard (US$3.17 billion)
- General Motors (US$610 million)
- Celanese (US$426 million)
- Globe Life (US$439 million)
And here are the two positions that Berkshire closed out of completely:
- McKesson (US$1 billion)
- Marsh & McLennan (US$77.7 million)
As you can see, Berkshire's sales over the quarter just gone easily exceeded the company's buys. That's even after accounting for the US$1.3 billion worth of Berkshire share buybacks Buffett greenlit during the quarter.
So Buffett and Berkshire Hathaway were net sellers of shares over the three months to 30 June. What can ASX investors learn from this?
What can ASX investors learn from Warren Buffett?
These results are arguably rather hard for us mere mortals to get our heads around. For example, one could make the argument that Warren Buffett is bullish on energy stocks, judging by the US$818 million addition to Berkshire's Occidental Petroleum position. But if Buffett is indeed betting on higher oil prices, why would he sell US$1.52 billion worth of oil giant Chevron?
The General Motors sale is interesting as well. Buffett offloaded 45% of Berkshire's stake in GM. But GM stock has been treading sideways for years, and today remains down 7.45% over the past five years, and down nearly 50% from where it was in late 2021. So why sell now?
Some things only Buffett knows.
But what we can be certain of is that Buffett is not finding too much value in the current markets. It's not like Berkshire hasn't got money to burn. According to CNBC, Berkshire had a monstrous cash balance of US$147.4 billion as of 30 June. Yet he only forked out US$1.92 billion on new stocks over the quarter (US$3.22 billion including the buybacks).
Is Warren Buffett waiting for the next stock market crash by amassing this cash pile? Or has he got something else in Berkshire's pipeline, perhaps a massive private acquisition? Again, only Buffett knows. But until the next quarterly disclosure of Berkshire's books, we'll have to keep guessing.
