On Monday morning, the Dow Jones Industrial Average fell more than 1,000 points, the kind of drop that comes only during periods of intense economic fear and anxiety. The fall was directly connected to Japan’s biggest market crash since Black Monday in 1987.
The stock market plunged over 2 per cent on Monday on heavy selling by investors after weak jobs data in the US raised worries over slowing economic growth in the country. Benchmark indices Sensex and Nifty have fallen for the second consecutive day.
Investors are watching with concern, hoping the markets bounce back.
Berkshire halves Apple stake
Warren Buffett’s Berkshire Hathaway lost $15B in the crash.
The company recently significantly reduced its Apple holding, cutting the stake by nearly half to $84.2 billion, as revealed in a recent SEC filing. Despite this reduction, Apple remains Berkshire Hathaway’s largest stock holding, underscoring the long-standing significance of this investment for the firm.
This move follows an earlier reduction of 13 percent in Apple shares earlier this year, which Buffett attributed to tax reasons. The sale has yielded substantial profits for Berkshire Hathaway, according to calculations by The Financial Times. Notably, Buffett, who had historically been cautious about technology investments, began accumulating Apple stock in 2016, marking a significant shift in his investment strategy.
Buffett’s decision to trim his Apple holdings might signal a shift in his outlook on the tech giant, or it could simply reflect a broader strategy of portfolio rebalancing. In addition to Apple, Berkshire Hathaway has been divesting other significant holdings, including $3.8 billion worth of shares in Bank of America.
According to at least one report, Berkshire’s cash stake grew to $276.9 billion as of June 30 from a then-record $189 billion three months earlier, largely because Berkshire sold a net $75.5 billion of stocks.
It sold about 390 million Apple shares in the second quarter, on top of 115 million sold from January to March, as the iPhone maker’s stock price rose 23%. Berkshire still owned about 400 million shares worth $84.2 billion as of June 30.
The second quarter was the seventh straight quarter that Berkshire sold more stocks than it bought.
Berkshire also repurchased just $345 million of its own stock, down from $2.57 billion in the first quarter, and none in the first three weeks of July.
The SEC filing coincides with Apple’s announcement of its third-quarter earnings. The company reported a decline in global iPhone sales for the second consecutive quarter, primarily due to increased competition from Chinese companies like Huawei. However, there was a notable bright spot in the growth of iPad sales. CEO Tim Cook highlighted that Apple is reallocating resources to prepare for the launch of Apple Intelligence, a comprehensive suite of AI features expected to debut in the fall.
The significance of Buffett’s actions lies in the historical context. His initial investment in Apple in 2016 was seen as a major endorsement of the tech sector, given his previous reluctance to invest heavily in technology companies. This move not only reflects Buffett’s evolving investment philosophy but also impacts market perceptions of Apple, given Berkshire Hathaway’s influential position in the market.
For Apple, the reduction in Berkshire Hathaway’s stake could raise questions about its future prospects, especially as it navigates a competitive landscape and shifts focus toward emerging technologies like artificial intelligence. For Buffett, the move illustrates his pragmatic approach to investment, balancing profitable exits with strategic repositioning in a dynamic market environment.