Warren Buffett Continues his Selling Streak, But He is Buying One Stock

Warren Buffett, a long-time value investor continues his selling streak for the 4th consecutive quarter, which has not been seen since the 2008 financial crisis.

Buffett’s Berkshire Hathaway sold $2 billion of equity in the third quarter, while cash position surged to a record of $149.2 billion.

Buffett’s caution came when US inflation posted a record high in 30 years for the month of October. At the same time, the consumer spending and labor market continued to see decline and weakness.  

In May, Warren Buffett sounded the alarm about the inflation coming ahead. He commented during the annual shareholders meeting, “We are seeing very substantial inflation. We are raising prices, people are raising prices to us and it’s being accepted.” 

As inflation rose in the third quarter, numerous tech and financial companies reported a sharp decline in earnings. Berkshire Hathaway also posted a slow down of earnings to just $10 billion, profits were down 60% from the same quarter last year. 

Despite some growth and resilience from the company’s railroad manufacturing business due to output increases, its core investment portfolio has declined by 85% since last year. Buffett’s insurance business has also been affected by Hurricane Ida. Berkshire highlighted the supply chain crisis and inflation as big concerns going forward, several businesses experienced high prices from materials, even insurance companies reported higher accident claims due to the increase in vehicle prices. 

Even though the company may not be involved in many investment activities, Buffett still shows his faith in his own company’s growth. While not being able to find any bargains in the stock market, Buffett’s Berkshire repurchased $7.6 billion of its own stocks, topping $6 billion in the second quarter, for a total of over $20 billion so far this year. According to Barrons, the company’s equity portfolio totaled $311 billion at the end of the third quarter, with about 40% stakes in Apple stocks.

 

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