Elsewhere, Colin Farr, wealth manager at Savvy Advisors, points out that Berkshire Hathaway stock is up nearly 26 percent year-to-date and has more than doubled in price over the last five years. The significant slowdown in buyback activity, combined with Jain’s sales, lead Farr to believe that Jain thinks the stock is fully valued.
“I think Berkshire’s recent reductions in their Apple and Bank of America positions can be attributed more to booking profits rather than a hedge against a near term recession,” said Farr.
Furthermore, as a long time Berkshire shareholder with a long term outlook, Farr says he will continue to hold the stock because he believes Warren Buffett when he said in his annual letter that “Berkshire should do a bit better than the average American corporation and, more important, should also operate with materially less risk of permanent loss of capital.”
Michael Leverty, founder of Leverty Financial Group, meanwhile, says Berkshire’s actions offer mixed signals. On one hand, its reduced stakes in Apple and Bank of America may indicate that the company is positioning itself more conservatively in the current economic environment. Bank of America’s challenges could be related to interest rate volatility, while Apple has faced concerns about supply chains and demand.
“These moves suggest a cautious outlook, especially given the uncertainty in the financial sector and the global economy,” said Leverty.