Warren Buffett, the renowned investor and chairman of Berkshire Hathaway, sold off seven stocks in the third quarter of this year, accumulating a record $157 billion cash position. The stocks that Buffett completely sold off include General Motors, Celanese, Activision Blizzard, Mondelez International, United Parcel Service, Procter & Gamble, and Johnson & Johnson.
Buffett’s decision to sell off General Motors comes after reducing his holdings in the carmaker by 45% in the second quarter. The additional costs GM would incur due to a contract settlement with the United Auto Workers union may have influenced Buffett’s decision. The contract settlement is expected to increase labor costs by $9.3 billion over the contract term and inflate the cost of a new car by $575.
Buffett also soured on global chemicals specialist Celanese, deviating from his typical buy-and-hold philosophy. Despite being a leader in its space, Celanese’s lack of growth and a 16% decline in stock value since the beginning of 2022 led to Buffett shedding shares.
Buffett’s investment in video game maker Activision Blizzard was initially an arbitrage play, but he started selling off shares as merger negotiations with regulators dragged on. The completion of the deal between Microsoft and Activision prompted Buffett to close out his position.
Mondelez International, a snacks giant, was once a significant position in Berkshire Hathaway. However, Buffett had gradually reduced his stake over the years, and the position remained stagnant. Despite Mondelez’s outperformance compared to Kraft, Buffett decided to shed the remaining shares.
Buffett also sold off his small positions in United Parcel Service, Procter & Gamble, and Johnson & Johnson. The decision to tidy up the portfolio and allocate funds for potential future investments may have influenced these moves.
It’s worth noting that some of the stocks Buffett sold off experienced gains after his exit. However, his decision to accumulate a substantial cash position suggests a cautious approach, potentially preparing for a future market downturn.
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