Warren Buffett Dumps Billions in Stocks

Warren Buffett Dumps Billions in Stocks

(UnitedVoice.com) – Warren Buffett is one of the richest men in the world, a well-known investor and business magnate who currently heads up Berkshire Hathaway. Because of his immense success, when he makes moves on the stock market, people pay attention. A recent move of his now has people concerned about the state of the economy.

Buffett, along with Ajit Jain and Gregory Abel, who co-chair the holding company, held a meeting where they discussed the first quarter financials with Berkshire Hathaway stockholders. According to the Financial Times, what they revealed was stunning. The firm sold $13.3 billion in stocks from January to March but only reinvested about half of it — $7.3 billion. Of that, $4.4 billion went toward repurchasing the firm’s own stock. It invested the remaining $2.9 million in other publicly-traded companies.

Steve H. Hanke, who worked on the Council of Economic Advisers under former President Ronald Reagan and is a professor of applied economics at John Hopkins University, told Newsweek the move signals that Buffett anticipates a looming recession. David Nicholas, who owns Nicholas Wealth Management, also spoke to the publication, calling the dumping of the stocks a “warning to investors” that’s “very telling.”

Hanke also noted that “Buffett knows cash is king,” and these recent moves have done much to increase the firm’s cash on hand. According to Financial Times, Berkshire Hathaway’s cash pile increased by $2 billion. It now sits at $130.6 billion.

At the shareholder meeting, despite the possibility of a US recession, Buffett nevertheless remained positive about both the economy and the company’s prospects, even if he did expect the earnings in the firm’s businesses to decline. He also addressed the banking industry, one he has been known to support in the past. On that note, he said the firm is now acting with more caution because of the recent troubles the industry has experienced.

Berkshire Hathaway has continued to fare well, with its stock rising 4.9% in 2023 so far. Buffett himself also remained upbeat throughout the meeting.

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