Warren Buffett’s portfolio moves never fail to spark a wave of interest, and his latest decisions certainly haven’t disappointed. For the first time since amassing a staggering $325 billion in cash reserves, Berkshire Hathaway’s investment master has made some eyebrow-raising shifts, splashing cash on new stock acquisitions while scaling back major holdings.
Berkshire Hathaway’s announcement of a record $325 billion in cash has been a conversation starter, with the company now boasting more Treasuries than even the Federal Reserve. The cash pile now represents 28% of Berkshire’s total assets, a proportion not seen in over three decades. Such a monumental war chest raises obvious questions about Buffett’s strategy, and many were surprised when he announced a pause in stock buybacks, a notable shift from $345 million in repurchases in the second quarter of 2023, following $2 billion in each of the two quarters before that. Buffett explained that buybacks would resume only if the repurchase price fell below Berkshire’s intrinsic value—a characteristically Buffett condition.
Despite the pause in repurchasing Berkshire’s own stock, Buffett did not sit idle. His Q3 2024 portfolio revealed two intriguing new stock picks: Domino’s Pizza ($DPZ) and Pool Corporation ($POOL). The purchases seemed to signal a belief that these companies are currently undervalued, with after-hours trading reacting in kind. Domino’s shot up 8.5%, and Pool Corp climbed over 5% in response to Buffett’s backing.
Investors love to speculate about the reasoning behind Buffett’s choices, and his move into Domino’s Pizza is especially captivating. Berkshire Hathaway’s portfolio already includes Dairy Queen, so this new investment suggests an ongoing faith in the fast-food and casual dining market. Buffett’s well-known philosophy of sticking to what he knows and trusts adds weight to this idea. Domino’s, famous for its broad delivery network and recent innovations in mobile ordering, seems to align perfectly with the long-term strategies that Buffett favours.
Pool Corporation, meanwhile, serves as a unique pick. The company distributes swimming pool supplies and maintenance products, and its success is heavily tied to trends in home improvement and recreation. A bet on Pool Corp hints at optimism about sustained interest in home luxury and outdoor entertainment. As ever, Buffett’s choices appear grounded in a clear understanding of market fundamentals.
On the flip side, Buffett made significant cuts to his portfolio, offloading chunks of well-established holdings. Most strikingly, he sold 25% of his Apple ($AAPL) stock, slashing his stake to under $70 billion. Apple, which has long been a jewel in Buffett’s investment crown, still accounts for a quarter of Berkshire Hathaway’s portfolio, but such a substantial sell-off naturally grabbed attention. The reasons behind this divestment are subject to debate. While some interpret it as Buffett preparing for an economic downturn or potential market correction, others argue he’s simply cashing in on gains made years ago. After all, Apple remains a dominant force in his portfolio.
In addition to Apple, he reduced his positions in Ulta Beauty ($ULTA), Bank of America ($BAC), Sirius XM ($SIRI), and Nu Holdings ($NU). These sales support a narrative of profit-taking, particularly since many of these investments were initiated long ago. But there’s a deeper layer to consider: Buffett has previously expressed concerns about the soaring national debt and hinted that higher taxes might be on the horizon. With the debt continuing to rise at a breakneck pace, Buffett’s decision to liquidate certain stocks could be a strategic play to manage tax liabilities, assuming that someone will indeed have to foot the growing bill.
As of the end of the third quarter, Berkshire Hathaway’s top five holdings remain largely unchanged, albeit with slightly adjusted weightings: Apple at 26.24%, American Express at 15.44%, Bank of America at 11.88%, Coca-Cola at 10.79%, and Chevron at 6.56%. These positions reflect Buffett’s steady hand, but the recent manoeuvres suggest he’s carefully navigating an unpredictable economic landscape.
Beyond the stock market, investors are left to ponder how Berkshire Hathaway’s shifts might foreshadow broader economic trends. Buffett’s outlook will likely factor in the upcoming U.S. election and the Federal Reserve’s interest rate policies, both of which could drive market volatility in the coming months. As interest rates and geopolitical pressures play out, swings in stocks, bonds, and commodities seem set to continue, and traders are bracing for the turbulence.
Buffett’s strategy is always the subject of intense scrutiny, and his track record makes it impossible to dismiss even his smallest moves. But predicting Buffett’s intentions is never straightforward. While some may view his scaling back of Apple as a sign of caution, others note that even after selling over $100 billion worth of stock, Apple remains his largest holding, showing his enduring belief in the tech giant’s staying power. This tension between defensive moves and calculated buys adds an element of intrigue to Buffett’s overall approach.
Berkshire Hathaway’s investment activity offers valuable lessons for observers and casual investors alike. Warren Buffett has often preached the virtues of patience and understanding what one owns, a theme that runs through his Q3 activity. By choosing companies with solid fundamentals and future potential, even if they aren’t the flashiest investments, he demonstrates how to adapt strategies without losing sight of core principles.
The spotlight is now on what the Oracle of Omaha will do next. As markets react to his every move, his influence remains a defining force in the investment world. Yet, for all the speculation about his market timing and motivations, Buffett’s most powerful message might be that sticking to what you know—whether it’s pizza chains, swimming pool supplies, or even a tech behemoth like Apple—can still pay off in uncertain times.
