Warren Buffett shares: Coca-Cola parallel might be a reference to Apple

A striking detail in Berkshire Hathaway’s stock portfolio has caught Wall Street’s attention as investors search for clues about what CEO Warren Buffett might do next.

“Berkshire owned exactly 400,000,000 shares of Apple and 400,000,000 shares of Coca-Cola as of June 30, 2024,” says David Kass, a finance professor on the University of Maryland’s Robert H. Smith School of Business. tweeted on Wednesday“If Buffett likes round numbers, he may not plan to sell any more Apple shares.”

In an email to AssetsKass acknowledged that the numbers could just be a coincidence, but said he believes Buffett is signaling that he is completed selling and “plans to hold his Apple shares indefinitely,” just like his Coca-Cola shares.

“Since Buffett has said that the CEO is the ultimate risk manager, I believe Buffett acted prudently by reducing Apple’s share of his portfolio from 50% to 30%,” he added, noting that Berkshire’s original Apple investment had been revalued from about $30 billion to about $180 billion.

Buffett’s followers – and investors at large – are puzzling over his possible intentions after the conglomerate announced earlier this month that it had reduced its Apple stake by nearly 50 percent. While analysts don’t imagine he’ll completely dump the remainder of his Apple shares, the dramatic cut within the second quarter raises questions on further reductions.

Of course, although Berkshire now holds the identical variety of shares in Apple and Coca-Cola, the values ​​of those shares are completely different. At Friday’s closing price, Apple’s share was price $90.4 billion, while Coca-Cola’s share was price $27.7 billion.

According to Kass, Apple accounts for nearly 50% of Berkshire’s equity holdings, while Coca-Cola accounts for 9%.

But because Coca-Cola is Buffett’s oldest and longest stock position, which has remained stable for a long time, the symmetry of his Apple shares was too tempting to disregard, because CNBC and the Wall Street Journal I also picked up on Kass’ tweet last week.

In addition, Buffett is a die-hard Coca-Cola fan, reportedly Drink five cans of Coke a daywhile he himself is an iPhone user and has praised Apple for the loyalty of its customers.

Representatives for Berkshire Hathaway didn’t immediately reply to a request for comment.

Analysts viewed the sale of Apple shares as a risk management measure, because the stock now represents a big a part of the portfolio. In fact, this followed earlier moves to scale back the portfolio. In May, Berkshire announced the sale of 100 million Apple shares, which on the time represented 13% of its holding.

CFRA Research analyst Cathy Seifert said Assets last week that the recent Apple share sale represented a “classic portfolio rebalancing.”

Because Berkshire’s portfolio is so heavily weighted towards a handful of stocks like Apple, there’s a risk of over-concentration, she said. Profit-taking may have played a job, because the sales got here at a time when the stock market as an entire was hitting one record after one other.

The stock sell-off helped Berkshire’s money holdings rise to a brand new high of $277 billion by the top of the second quarter, and Kass identified on X that it almost equals his $285 billion investment in stocks in total.

But despite his recent moves, Buffett remains to be seen as more of a buy-and-hold investor and has not undertaken major restructurings in comparison with his peers.

“Over the last decade, Berkshire’s average portfolio turnover rate has been quite low, often between 5 and 10 percent per year,” Kass tweeted“The average turnover rate for large-cap equity funds under management has typically been between 30% and 60% per year over the past decade.”

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