While Buffett’s philosophy has been consistent for decades — looking for solid companies with proven business models and holding them for the long term — that doesn’t mean he’s standing still. In the second quarter of 2024, there were significant moves in his portfolio, reflecting both his strategic approach and his reading of the current economic environment.
New bets: Occidental Petroleum and Ulta Beauty
One of Buffett’s most notable moves has been his big bet on Occidental Petroleum. Berkshire increased its stake to 255.3 million shares, making it one of the largest positions in his portfolio, representing 4.5%. Despite the volatility of the energy market and the ups and downs in global oil demand, Buffett remains confident in Occidental’s stability, which reaffirms his bet on the energy sector.
Another notable addition was Ulta Beauty, a beauty products chain that had seen a slowdown in demand. Ulta’s stock had fallen after a warning of lower sales in April, prompting Buffett to seize the opportunity to buy. Following the purchase, Ulta’s stock rose 11.2%, demonstrating the confidence that the “Oracle of Omaha” generates in the market. This investment is a classic example of his “buy when others sell” approach.
Berkshire also bought shares in Heico, a jet engine supplier, signaling interest in the aerospace industry that is recovering from the pandemic.
Strategic Sales: Paramount Global and Snowflake
Despite his new bets, Buffett also made some significant sales during this quarter. One of the most notable was his complete exit from Paramount Global, a media company. This decision suggests that Buffett is reducing his exposure to traditional sectors like media, which face significant challenges with digital transformation and competition in streaming.
Another notable sale was Snowflake, a cloud-focused technology company. While Snowflake remains a growing company, the high valuation and volatility of the sector may have influenced the decision to sell.
Berkshire also reduced its stake in Chevron, reflecting caution regarding oil prices and their volatility. Although Chevron remains an important part of its portfolio, the reduction in its position could be linked to an adjustment in its exposure to the energy sector.
Position reduction: Apple and Bank of America
Buffett made key decisions regarding two of his largest investments: Apple and Bank of America. Buffett reduced his stake in Apple by about 10% in the second quarter, still holding 400 million shares, which still makes Apple Berkshire Hathaway’s largest investment, valued at $84.25 billion. Although it still accounts for 31 % of Berkshire’s portfolio, the reduction in his stake shows profit-taking after the stock’s strong performance in recent years.
As for Bank of America, Buffett sold 21 million shares in September 2024. This reduction, although significant, keeps Berkshire as the bank’s largest shareholder with a 15% stake. The sale may be related to the volatility of the financial sector, particularly sensitive to economic cycles, and a possible adjustment in its exposure to banking.
Additional moves: Sirius XM and Chubb
In addition to the big buys and sells, Berkshire increased its stake in Sirius XM, acquiring more than 96 million shares. The move underscores Buffett’s interest in satellite entertainment and his confidence in the expansion of the subscription market.
Berkshire also increased its position in Chubb, a global insurer, underscoring Buffett’s continued confidence in the insurance sector, a key pillar of Berkshire Hathaway’s long-term strategy.
What does Berkshire Hathaway have in its portfolio?
Berkshire Hathaway’s portfolio remains dominated by large, quality companies that offer stability and profitability. Apple is the crown jewel, accounting for 31% of the portfolio after second-quarter cuts, down from 41%. Berkshire still owns 400 million shares, valued at $84.25 billion.
Bank of America remains important, accounting for about 15% of the portfolio, although it has shrunk. Berkshire owns 802.7 million shares of BAC. Other key holdings include:
- Coca-Cola, with 8% of the portfolio
- Kraft Heinz, with 5%
- Occidental Petroleum, now around 4.5%
- American Express, with 13%
- Chevron, which after the reduction represents 3%
Together, the top ten holdings account for more than 80% of the portfolio’s total value.
Berkshire Hathaway’s departure in 2024
Despite conservative decisions regarding cash accumulation and the sale of some of its largest holdings, Berkshire Hathaway has performed strongly, bringing its market capitalization close to $1 trillion. Class B shares are up 29% so far in 2024 and 34% over the past twelve months, reaching $460 per share, compared with $280 three years ago. This represents an increase of 64% in that period, reflecting the strength of the conglomerate.
Cash hoarding: What is Warren Buffett afraid of?
One of the most talked about aspects of late has been Berkshire Hathaway’s record $277 billion cash buildup at the end of the second quarter of 2024. This conservative strategy suggests that Buffett is waiting for a market correction, as he has done in previous crises, to take advantage of better buying opportunities. The buildup could be linked to economic and political uncertainty, including the upcoming US election and the possibility of higher corporate taxes.