Warren Buffett (C), CEO of Berkshire Hathaway, speaks to the press as he arrives at the 2019 annual shareholders meeting in Omaha, Nebraska, May 4, 2019. JOHANNES EISELE/AFP via Getty Images
Warren Buffett's Berkshire Hathaway has reduced its stake in Apple, selling about half of its shares and boosting its cash reserves to a record-high of nearly $277 billion.
However, Reuters reported that this came after a quarterly operating profit that earned a cautious approach from Buffett, one of the world's most respected investors. The 93-year-old seems to be growing wary of the US economy and potentially overvalued stock market valuations.
Berkshire Hathaway's decision to sell Apple and other stocks aligns with recent market trends, as the Nasdaq experienced a downturn and a weak jobs report, which raised concerns about the US economy. These issues have sparked speculation that the Federal Reserve may have delayed adjusting interest rates.
Now, in return, Berkshire Hathaway's cash reserves grew from $189 billion three months ago to $276.9 billion by the end of June. This increase came largely from a net sale of $75.5 billion in stocks, including about 390 million Apple shares sold in the second quarter, after selling 115 million shares earlier.
Despite these sales, Berkshire still holds approximately 400 million Apple shares valued at $84.2 billion.
In addition to offloading stocks, Berkshire's stock buybacks have also slowed. The company repurchased just $345 million of its own stock, a decrease from $2.57 billion in the first quarter, and none in the initial weeks of July.
Jim Shanahan, an analyst at Edward Jones, expressed concern about Warren Buffett's reluctance to invest in publicly traded stocks, including Berkshire Hathaway's own shares. This cautious approach has raised worries among some observers about Buffett's outlook on the market and the future of the economy.
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