Buffett Watch: Berkshire Was A Net Seller Of Stocks In Buffett's Final Quarter As CEO

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Berkshire was a net seller of stocks in Buffett’s final quarter as CEO

Berkshire has sold Apple shares in each of the last three quarters and in seven of the past nine three-month periods, reducing its shares by a bit more than 75% since the summer of 2023.

Even so, Apple remains Berkshire’s biggest equity stake with a value of $60.3 billion based on Friday’s close.

The Apple sales, however, have helped #2 American Express close the gap from almost $150 billion to just under $8 billion.

It’s six straight quarters of sales for Bank of America, reducing that stake’s shares by 75% since the middle of 2024.

Berkshire’s Amazon.com stake was valued at $2.2 billion at the end of the third quarter. It’s now down to $478 million after the sale of 7.7 million shares during the fourth quarter, a cut of 77%.

In 2019, when Amazon first appeared in Berkshire’s portfolio with an $860 million position, Buffett went out of his way to tell CNBC’s Becky Quick it wasn’t his decision, he didn’t think it was a significant holding, and no big “personality change” had reversed his traditional aversion to tech stocks.

Barron’s suggests it was portfolio manager Todd Combs who bought the shares and the big reduction may be related to his December departure to join JPMorgan Chase.

Investors were not deterred by Berkshire’s sales of the three stocks. They all ended higher on the week.

Buying oil and insurance

Berkshire increased its share stake in Chevron by 6.6% during the fourth quarter, adding another $1.2 billion to the position based on the oil giant’s year-end stock price.

That’s the biggest boost for any Berkshire stock in Q4, but there haven’t been any especially significant changes in the Chevron position over the past three years.

Higher crude oil prices have helped lift Chevron’s share price by 20.7% since the beginning of the year, putting the current value of the stake at almost $24 billion, up from $19.8 billion on December 31.

It is #5 by value among Berkshire’s stock holdings.

Chubb was the second biggest buy of the quarter with a 9.3% share increase adding about $910 million to the value of the position based on the insurer’s December 31 stock price.

Berkshire’s 34.2 million shares are currently valued at almost $11.4 billion, making it the eighth largest holding in Berkshire’s equity portfolio.

Berkshire takes small step back into the newspaper business

The only stock added to Berkshire’s portfolio during the fourth quarter was a relatively small stake in The New York Times Company.

It is currently valued at $395 million, up from $352 million as of the end of the year thanks to a 12.4% jump for the newspaper’s share price.

The New York Times building is seen in Manhattan, New York, August 3, 2020.

Shannon Stapleton | Reuters

Buffett’s love of newspapers goes way back. He delivered The Washington Post and other DC newspapers as a child, bought a very profitable Post stake for Berkshire in the 1970s, had a close friendship with Post publisher Katherine Graham, and worked closely with the editor of a small Berkshire-owned Omaha weekly that won a Pulitzer Prize in 1973.

But in 2020, Berkshire sold its newspaper holdings, including Buffett’s hometown daily, The Omaha World-Herald, and The Buffalo News, a Berkshire property since 1977, to Lee Enterprises for $140 million.

Based on the relatively small size of the Times stake – it accounts for 0.1% of the value of Berkshire’s equity portfolio – it almost certainly was not a Buffett purchase, with either portfolio manager Ted Weschler, or Todd Combs (before he departed) making the decision to buy.

While the Times purchase is almost spare change by Berkshire standards, it is more than the $250 million Jeff Bezos paid for The Washington Post in 2013, a price that was thought at the time to be four times what the newspaper was worth.

The current market value of the Times Company is $12.6 billion, giving Berkshire a 3.1% stake.

Berkshire’s vote of confidence appeared to add to the Times’ momentum, with shares ending the week with a 6.9% gain at an all-time closing high near $78.

A complete list of Berkshire’s U.S. holdings as of December 31 appears below.

Berkshire utility settles federal wildfire claims

Berkshire Hathaway’s PacifiCorp took two significant steps this week to deal with the enormous liability claims it faces over wildfires in the West.

On Friday, the Justice Department announced the utility has agreed to pay $575 million to resolve damage claims lodged by the U.S. government over six fires in California and Oregon in 2020 and 2022.

The government says PacifiCorp’s electrical lines “negligently” started all six fires. Its news release notes the “claims resolved by this settlement are allegations only and there has been no determination of liability. PacifiCorp continues to deny liability for these fires.”

A DOJ official is quoted as saying the agreement “strikes a balance by addressing the government’s significant fire-suppression costs and loss of natural resources without preventing PacifiCorp from offering electricity at fair prices.”

A PacifiCorp statement says the company has now settled “nearly 90% of known claims” for more than $2.2 billion, “providing certainty for customers and progress toward a financially healthy utility.”

A NASA MODIS satellite image shows wildfires in Oregon, U.S. September 8, 2020. Picture taken September 8, 2020.

Maxar Technologies | via Reuters

BUFFETT & BERKSHIRE AROUND THE INTERNET

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HIGHLIGHTS FROM CNBC’S BUFFETT ARCHIVE

How Berkshire’s utilities now respond to the threat of wildfires (2025)

Greg Abel describes how Berkshire utilities are working to reduce the risk their equipment could contribute to wildfires.

BECKY QUICK (relaying a shareholders’ question): “Please, discuss your strategy on how to protect our company from future liabilities due to wildfires blamed on our electric utility companies out West.”

WARREN BUFFETT: Well, that’s a very good question. And — and we’ve — we’ve made some mistakes in the past when we bought PacifiCorp in 2000, what, five?

GREG ABEL: Yes.

WARREN BUFFETT: Walter Scott, and David Sokol, and myself, three guys who — capitalists at heart — and we’re dealing with our own money.

But we made a mistake by not carving it up into seven states that we were buying. And it came — it came with an aggregation, where it wasn’t state by state. And we — we kept the same — the same structure. And that was a — that was a big mistake.

There are — well, every part of the country is going to need electricity. And there are going to be places where — where public electric — privately-held electric utilities would be very foolish to operate.

And how that gets resolved in a democracy, we will find out.

But those are the facts, as they stand now, I would say.

Greg?

GREG ABEL: Yeah. The reality, the risk around the wildfires, i.e., that the wildfires occur, they’re not going away. And we know that. And the risk probably goes up each year, so —

But what we can do to reduce the risk of it impacting our system, and our underlying asserts, and the, unfortunately, the liabilities that come with such events, we can change that and manage that…

We then take it even further. And this is something Warren and I have discussed many times, is that the utilities have started to recognize when we have these unusual weather events. And Warren touched on what’s been happening in Nebraska with storms.

But they’re equally occurring — or significant events occurring — out West.

But when we have those, we’ve gotten very, very good at saying, OK, we have to manage the system differently. We’ll potentially de-energize because there’s likely to be an event.

But the one thing we hadn’t tackled — and this is very relevant to the one significant event we had back in 2020 in PacifiCorp — is we didn’t de-energize the system as the fire was approaching, because our employees and the whole management team had been, all their lives, trained to keep the lights on.

And the last thing they want to do is turn those lights off and have a system de-energized.

And after those events, and as we really looked at how we’re going to move forward in managing the assets and reducing that risk, we have clearly recognized, as a team, that we have to de-energize those assets.