Warren Buffett’s company, Berkshire Hathaway, sold all of its General Motors (GM) stock, valued at $850 million, last quarter. This information comes from a filing with the Securities and Exchange Commission.
The value of GM’s shares went down by about 0.3% on Wednesday. GM had recently predicted that a strike by autoworkers in the fall would reduce its earnings by around $800 million for the year.
Warren Buffett’s Berkshire Hathaway Adjusts Portfolio
While General Motors makes up a small part of Berkshire’s portfolio, it seems that the company is reducing its investment in several well-established, large companies often referred to as “blue chip” names.
The Oracle of Omaha also sold off some of Berkshire’s other holdings, including Amazon, HP, Chevron, Procter & Gamble, UPS, Mondelez International and Johnson & Johnson in the third quarter.
In the last quarter, Berkshire Hathaway sold more stocks than it bought, with sales amounting to around $7 billion and purchases totaling $1.7 billion. Over the past year, the company has sold approximately $40 billion worth of stocks.
Despite the overall selling trend, Berkshire Hathaway did add to its portfolio by acquiring nearly 10 million shares of the satellite radio company Sirius XM for $50 million. This investment represents just under 1% of Sirius’ total market value. Following this news, Sirius XM’s shares rose by almost 6% on Wednesday.
Berkshire Hathaway’s Financial News
By the end of the quarter, Berkshire had a record-breaking $157 billion in cash. This surpasses the $147 billion it had at the close of the second quarter and exceeds its previous record of $149 billion set in 2021.
Most of this money is in short-term Treasuries. The increase is attributed to rising interest rates and a decline in deal activity on Wall Street, limiting Buffett’s chances to acquire new companies.
Despite a credit downgrade for the US from AAA to AA+ by Fitch Ratings, Buffett remained unfazed. On August 3, he mentioned to CNBC that Berkshire invested $10 billion in US Treasuries that week, following a similar investment the previous week. Buffett quipped, “The only question for next Monday is whether we will buy $10 billion in 3-month or 6-month Treasury notes.”
Earlier this month, Berkshire Hathaway announced that its investments in foreign markets have been profitable.
Successful Expansion in Japan
In 2020, Berkshire disclosed that it had acquired around 5% stakes in each of Japan’s leading five trading companies, amounting to $6.7 billion in investments at that time. This year, the company increased its stakes in each of these companies to an average of over 8.5%, benefiting from Japan’s stock market reaching its highest point in 33 years.
Charlie Munger, the vice chair of Berkshire Hathaway, described the investments as incredibly lucrative, comparing it to a situation where it felt like money was pouring in. Munger shared this perspective in an interview with the Acquired podcast, released in October.
While Berkshire Hathaway’s shares have increased by about 15.8% year to date, the broader S&P 500 has seen a 17.4% increase during the same period.
Summary
Berkshire Hathaway, led by Warren Buffett, made strategic moves in its portfolio, selling off General Motors and adjusting investments in various companies. Despite the overall selling trend, Berkshire expanded its holdings in Sirius XM. The company also demonstrated success in Japan and maintained a substantial cash position amid market fluctuations.
