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Buffett Is Bearish: Berkshire Hathaway Was a Net Seller in Q4 2019

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When Warren Buffett and Berkshire Hathaway reveal their latest positions, markets move. Already sitting on a record cash pile, the company was a net seller of stocks in the fourth quarter of 2019, suggesting an overall bearishness about current valuations.

The latest market-moving instance came with Friday’s revelation that Berkshire Hathaway (NYSE: BRK.B) paid $549 million for a 2.4% stake in supermarket mega-chain Kroger Co. (NYSE: KR), and another $192 million for a 0.4% stake in biopharmaceutical giant Biogen (Nasdaq: BIIB).

The announcement, which was part of Berkshire’s latest quarterly filing with the Securities and Exchange Commission, set off a buying spree in the two companies by other investors that added more than $2 billion to their market caps Tuesday. Markets were closed Monday in observance of the Presidents’ Day holiday.

The news sent Kroger stock soaring as much as 7% this morning to just over $30 a share, lifting its market cap to more than $24 billion. Biogen, which is a far more expensive stock at more than $330 a share, saw a more modest 1% spike, raising its market cap to nearly $59 billion.

The moves generally show that Berkshire is bearish on current stock prices because it was again a net seller for the quarter. In all, the company bought almost $1.6 billion worth of stocks while selling about $7 billion, according to The Motley Fool.

Berkshire Hathaway’s Other Q4 moves

Additionally, Berkshire bought into two ETFs that track the S&P 500: the Vanguard S&P 500 (NYSEARCA: VOO) and the SPDR S&P 500 (NYSEARCA: SPY).

The company also bought positions in Occidental Petroleum Corp. (NYSE: OXY), Suncor Energy (NYSE: SU), RH (NYSE: RH) and General Motors Co. (NYSE: GM).

Berkshire shaved positions in Wells Fargo & Co. (NYSE: WFC), Goldman Sachs Group Inc. (NYSE: GS), The Travelers Companies Inc. (NYSE: TRV), Apple Inc. (Nasdaq: AAPL) and Phillips 66 (NYSE: PSX).

While Berkshire cut its position in Apple, it was only by about 1.48% of its total holdings and it still owns 245,155,566 shares, accounting for 29.74% of its total portfolio, its largest investment.

Berkshire’s second-biggest holding is Bank of America Corp. (NYSE: BAC), followed by Coca-Cola Co. (Nasdaq: COKE), American Express Co. (NYSE: AXP), and Wells Fargo, which now makes up 7.18% of its total portfolio after cutting its position.

In all, Berkshire’s portfolio holds 52 stocks and is valued at $242.05 billion.