Warren Buffett is one of the most successful investors of all time.
His holding company Berkshire Hathaway owns and holds stakes in dozens of companies, including GEICO, Duracell, Dairy Queen, Coca-Cola, Apple, Bank of America, and American Express, among others.
Every quarter, Berkshire publishes a quarterly report revealing its financial position and stock trades – providing investors with insight as to which stocks the Oracle of Omaha bought and sold over the three previous months.
What does Berkshire’s most recent filing reveal? Which stocks did he sell? Should you copy his trades?
In Q4 2021, Warren Buffett sold stocks of two major credit card companies
As our society becomes increasingly cashless, credit card companies continue to grow and gain importance. However, Berkshire’s Q4 filing reveals that Buffet sold both Visa and Mastercard stock last year.
Indeed, Berkshire sold 1.27 million shares of Visa, which represents roughly 13% of its total holdings. This is surprising given that Visa is growing steadily since going public a little over 10 years ago.
In addition, Berkshire also sold 302,000 shares of Mastercard, reducing its stake by 7%. Again, analysts are surprised, given that Mastercard regularly posts stellar financial results.
Is Warren Buffett weary of the disruption taking place in the digital payments sector? Is he concerned that blockchain and crypto will steal credit card companies’ market shares? Or is he simply trimming his stake to invest in other areas?
The number of shares sold is quite high, but represents a small portion of his overall credit card portfolio. Thus, this sell-off may simply be a trimming of profits for reinvestment purposes.
Warren Buffett also sold numerous pharmaceutical stocks
Is Buffet predicting that the COVID-19 pandemic is finally coming to an end? If his trades are any indication of his faith in the return to normalcy, humanity may have reasons to be optimist.
In Q4 2021, Berkshire Hathaway sold shares of numerous biotech and pharmaceutical stocks, including Teva Pharmaceuticals, Abbvie, Bristol-Myers Squibb Biogen, Merck, Pfizer and Organon.
While Buffet is famed for being a “Buy and hold forever” type of investor, it is important to note that he frequently buys and sells shares for the short-to-medium term. Most of the pharmaceutical stocks he sold in Q4 2021 were purchased less than four years ago.
Berkshire sold millions of shares in other companies
In Q4 2021, Buffet also reduced Berkshire’s positions by offloading the following stocks:
- 43.7 million shares of satellite-radio leader Sirius XM Holdings.
- 3,795,000 shares of insurance firm Marsh McLennan.
- 371,685 shares of Charter Communications.
- 350,000 shares of supermarket operator Kroger.
Evidently, Buffet had a busy Q4 2021.
This leads us to the million-dollar question: should you copy Berkshire Hathaway’s trades?
Indeed, it’s unclear why Buffet sells stocks.
Is he selling because he is losing faith in the business, or because he has identified other investing opportunities? Often, we don’t know the answer until several months, even years later.
Thus, investors should focus on their own positions and refrain from copying all of Buffet’s trades.
Visit tradelikebuffett.com to monitor Warren’s latest trades and portfolio.