According to Berkshire Hathaway's quarterly report released on Saturday, the company sold nearly half of its shares in Apple Inc. So, how do investment experts view the operations of the "stock god" Buffett?
Regarding this, Duan Yongping recently replied to a netizen's question about whether he has already reduced his holdings of Apple in advance, saying, "I have no plan to reduce my holdings unless I am called to leave. The main reason is that I don't know what else to buy after selling. And I think in the long run, I can accept the returns that Apple can bring me in the future. Buffett is different. He is a professional investor and has more choices
At the same time, on August 4th, Dan Bin, Chairman of Dongfang Port, posted on Weibo that it was not surprising to see the news that Berkshire Hathaway's holdings of Apple shares had decreased from 789 million shares in the first quarter to about 400 million shares, a decrease of nearly 50%. However, it still felt a bit surprising to see so many reductions.
He said, "Apple accounts for about 10% of our portfolio in Dongfang Port's holdings. Even if we saw Ba Lao reduce his holdings, we did not follow the idea of reducing them because in the era of artificial intelligence, Apple is also one of the most beneficial companies. After the emergence of artificial intelligence phones, there is still a high probability of new growth levels and growth space
The full text is as follows:
@Dan Bin's Weibo screenshot
On the evening of August 3rd Beijing time, Berkshire Hathaway released its second quarter report for 2024. According to financial report data, Berkshire Hathaway's revenue for the second quarter of 2024 was $93.653 billion, with market expectations of $91.09 billion, compared to $92.503 billion in the same period last year, a year-on-year increase of 1.24%; Net profit of 30.348 billion US dollars exceeded the market expectation of 17.786 billion US dollars, compared to 35.912 billion US dollars in the same period last year, a year-on-year decrease of 15.49%; In the second quarter, operating revenue increased to $11.598 billion.
Berkshire Hathaway's cash reserves hit a new record high in the second quarter, reaching $276.9 billion, compared to $189 billion at the end of the previous quarter.
In terms of holdings, the financial report shows that as of June 30, 2024, 72% of Berkshire Hathaway's total fair value equity investments were concentrated in American Express, Apple Inc., Bank of America, Coca Cola, and Chevron, with market values of $35.1 billion, $84.2 billion, $41.1 billion, $25.5 billion, and $18.6 billion, respectively.
In terms of specific portfolio adjustments, Buffett significantly sold off his stake in Apple Inc. in the second quarter. The company significantly reduced its holdings of Apple Inc. from 789 million shares in the first quarter to approximately 400 million shares in the second quarter, a decrease of 49.3%; Berkshire Hathaway's holdings in Apple were valued at $84.2 billion, a decrease of 51.69% from $174.3 billion at the end of the first quarter.
Currently, Berkshire Hathaway holds approximately 2.6% of Apple's shares, valued at $87.944 billion based on Friday's closing price of $219.86.
After the stock market closed on August 1st local time, Apple released its third quarter financial report for the 2024 fiscal year ending on June 29th. According to the financial report, Apple achieved revenue of $85.777 billion this quarter, a year-on-year increase of 4.9%, higher than analysts' expectations of $84.46 billion; Non GAAP net profit was $21.448 billion, a year-on-year increase of 7.9%; Diluted earnings per share (EPS) were $1.40, a year-on-year increase of 11%, higher than market expectations of $1.35.
However, Apple's performance in the Greater China region in the third quarter was disappointing, with revenue falling 6.5% year-on-year to $14.73 billion, lower than analysts' expectations of $15.26 billion.
Previously, Berkshire Hathaway reduced its stake in Apple by 13% in the first quarter and hinted at its annual meeting in May that this was due to tax reasons. Buffett pointed out that if the US government wants to make up for the continuously rising fiscal deficit and increase capital gains tax, then this year's "small sale of apples" will benefit Berkshire Hathaway shareholders in the long run.
Buffett's reduction in Apple shares is not surprising, but the scale of the reduction is unexpected. Some Berkshire Hathaway observers have anticipated this reduction, as once Buffett begins to reduce his holdings, he usually continues to reduce a large number of shares, with external expectations of a reduction of around 100 million shares.
It should be noted that on Friday, despite concerns about an economic recession that severely impacted the US stock market, Dan Bin still chose to go against the trend and increase his holdings.
On the evening of August 2nd, Dan Bin posted on Weibo that the trend tonight (Friday) was not good, but the new money still made the trader execute the buy order at the average price! Long term value investing, whether in A-shares or the US stock market, has never been achieved through "lying down and winning".
Dan Bin stated that value investors need to understand and distinguish between the "noise of volatility" and the "main contradiction of long-term investment". When the long-term cornerstone logic has not been destroyed, they should adhere to our investment with the belief of "unity of knowledge and action". Those who know, there is no one out of ten; Those who walk on it, there is no one in ten; Multiplying the two together, the one who combines knowledge and action is the one in a hundred. This is the difficulty of value investing.
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