In the third quarter, Warren Buffet’s Berkshire Hathaway (BRK.B) was widely watched by value investors.
The investment firm sold its entire stake in General Motors (GM). This is a wise move. Staff costs are soaring after the UAW accepted a wage increase of 20% for base hourly rates. Skilled trades get a 25% hike. Yet GM is stuck selling expensive trucks and SUVs at a time when consumers are shunning high-priced items.
Berkshire sold Activision (ATVI) after Microsoft (MSFT) closed its $95 buyout in Q3. It divested its small positions in J&J (JNJ), United Parcel Service (UPS), Proctor & Gamble (PG), and Mondelez (MDLZ). Both JNJ and PG stock could face margin pressure. It may have trouble passing inflationary input costs to its customers.
The firm still holds 915.6 million Apple (AAPL) shares. Berkshire appreciates the branding power and customer loyalty for Apple devices. Services, Apple Pay, and steaming content expand profit margins per user.
Berkshire’s holdings of American Express (AXP), Apple, Bank of America (BAC), Coca-Cola (KO), and Chevron (CVX) account for nearly 80% of the nearly $320 billion in assets managed. It is a good diversification of holdings exposed to credit, technology, banking, consumer goods, and energy.
