What's going on?
Late last week, Warren Buffett – the world’s third-richest person – disclosed that he pared back his orchard and reduced his company’s shareholding in Apple last year.
What does this mean?
Buffett’s investment firm, Berkshire Hathaway, pruned its stake in the tech behemoth by 1% in the final quarter of 2018, ahead of Apple’s warning of slowing iPhone sales (tweet this). And Berkshire also dumped $2 billion worth of software firm Oracle’s shares just three months after picking them up.
But Buffett is no technophobe: Berkshire bought over four million shares in software company Red Hat (though it’s unknown if that was before or after IBM splashed $34 billion on buying the company). Berkshire also continued to bet on insurance companies: more on how they’re faring next story…
Why should I care?
For markets: Shares buffeted by Buffett.
Berkshire Hathaway is a global bellwether for investors: where Buffett boldly goes, others often follow. Red Hat’s shares edged up on Friday, likely bolstered by Berkshire’s vote of confidence – and Apple’s shares fell slightly. Buffett’s opinion carries some serious weight among investors, and Berkshire’s latest update suggests worries about the futures of the companies it sold. Heed-taking investors jumped on the doubt train with him – and stayed on it as far as Apple is concerned: according to recent data from TipRanks, investor sentiment is now “very negative” on the US’s first trillion-dollar company.
The bigger picture: Buffett’s backing crypto (sort of).
Buffett also bet big on US banks, boosting Berkshire’s stake in JPMorgan Chase – right before JPMorgan announced its own cryptocurrency. The so-called “JPM Coin” is the first of its kind for a US bank and a bold move after JPMorgan’s CEO previously ridiculed bitcoin as a “fraud”. Whether Buffett knew it or not, Berkshire Hathaway is now tied up in a bet on what some see as the future of banking: blockchain (the technology that powers crypto).