Warren Buffett Sold $80 Billion of Apple Stock (AAPL)

Warren Buffett informed Berkshire Hathaway shareholders in May that he considers Apple stock (AAPL -1.53%) to be "an even better business" than American Express and Coca-Cola, which he referred to as "wonderful businesses." The legendary investor also noted that Berkshire intends to hold all three stocks indefinitely "unless something truly extraordinary occurs."

A Small Portion Invested in Stocks

Given Warren Buffett's reputation as one of the greatest stock pickers of all time, one might expect him to allocate a significant portion of the proceeds from the Apple sale to purchase more stocks. However, that hasn't been the case.

Buffett did make some stock purchases for Berkshire's portfolio, with the largest being nearly 97 million additional shares of Sirius XM Holdings. Even at the highest share price during Q2, this investment would have only accounted for about $3.7 billion, and the total could have been even lower, as the stock declined by 27% in the quarter.

Additionally, Buffett increased Berkshire's stakes in Occidental Petroleum and Chubb during Q2. While it's challenging to pinpoint the exact amount spent on these additional shares, the figures were likely in the hundreds of millions rather than billions.

The same trend is evident in new positions Buffett and his team initiated in Q2. Berkshire acquired around 1.04 million shares of Heico, valued at $185.4 million by the end of the quarter, and over 690,000 shares of Ulta Beauty, worth $266.3 million.

In terms of capital allocation, Berkshire spent $2.9 billion on share repurchases in the first half of 2024, with $2.6 billion occurring in the first quarter. This indicates that approximately $300 million was used for stock buybacks in Q2.

Where Buffett Invested Most of the Money

Buffett likely allocated no more than $5 billion from the proceeds of the Apple transactions in Q2 for stock purchases, including share repurchases of Berkshire Hathaway. So, where did the remaining funds go?

When the "Oracle of Omaha" isn’t investing Berkshire's cash in stocks, he typically invests it in U.S. Treasury bills. At the end of Q1, Berkshire held $157.4 billion in Treasuries, which surged to $238.7 billion by the end of Q2—an increase of $81.3 billion. Additionally, Berkshire's cash position, excluding short-term Treasuries, rose by about $4 billion during the quarter.

It's important to note that the totals from selling Apple don’t precisely align with the amounts invested in stocks, Treasuries, and held in cash. This discrepancy arises because Berkshire generated positive cash flow during Q2.

The conclusion is clear: most of the money from the Apple sale in Q2 was directed toward Treasuries rather than stocks or other investments. While Buffett may regard Apple as a superior business compared to his "wonderful" long-term holdings like American Express and Coca-Cola, he seemingly considers the safety and reliability of U.S. Treasuries to be an even better option for a substantial portion of Berkshire's capital.

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