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If we take a look at the most recent 13f filings, Warren Buffett over at Berkshire Hathaway has been selling more stocks compared to buying. Let's analyze why...

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One of the most important things that I like to do, is keep up to date with billionaire investors portfolios. What stocks are they buying, what stocks are they selling, why are they doing this. And the recent portfolio that I’ve been looking at is Warren Buffett. Aka the investing GOAT.

Now Warren Buffett he runs an investing firm, which is the largest in the world, Berkshire Hathaway. If we take a look at their portfolio they’ve been doing a lot of selling, in-fact more selling than buying. They sold / reduced 11 stocks in the most recent quarter, and they bought / added to just 9 stocks.

So let’s take a look at this, this is very interesting. JP Morgan the bank, he sold 100% of his position. Pfizer 100% sold, 3.7 million shares in total.
PNC Financial services again 100% sold, 1.9 million shares.
MT bank, he no longer hold any shares in, all sold out of.
And the last one that he sold 100% out of his is Barrick gold corporation the gold mining company. I find that sale particularly interesting during this time, we can talk about that soon.

But let’s continue along this list. Wells Fargo, almost 60% was sold out of this bank stock. Suncor Energy, 28%. Liberty 10.2%, General Motors the giant vehicle manufacturing company that was reduced by 9.38%.

Apple, that’s an interesting one, he’s made a lot of money with Apple stock over the past couple of years. But recently he sold out of 6% of his position.
And the last stock that he sold was U.S Bancorp. 0.6% worth a total of 823 thousand shares.

Now I find this very interesting because Warren Buffett those of you who know him, he’s normally against selling stocks. That’s why he says “our favourite holding period is forever”. Aka never selling stocks. But if we look at his most recent fillings, he’s kind of been doing the opposite of what he likes to do. And these as you just saw, they’re not small sales. They’re not 1,2,3,5% reductions.

They are huge reductions in the stocks that he owns. He sold 100% out of JP Morgan, Pfizer, PNC, M & T Bank & Barrick Gold. He sold 58% out of Wells Fargo, & 28% out of Suncor Energy. So the main question that we should be asking ourselves. Is why is he selling out of so many of his positions. Particularly the banking sector.

PNC Financial, JP Morgan, Wells Fargo, M & T Bank, US Bancorp, all of these apart from US Bancorp he dramatically reduced his positions in. Most he sold completely out of. And the banking sector is normally one which Buffett likes. He’s owned bank stocks for a number of year now, so what’s changed?

First is the economic environment that we’re in. All of this debt, all of this free money, these low interest rates that we see. A lot of investors are worried about a new great depression. And what happened in the great depression most of the banks failed and had to shut down.

In-fact in the last financial crisis, Buffett actually had to help bail out goldman sachs with $5 billion dollars to help it recover. So it is fair to argue that over the next 5 years, especially if we see tough economic conditions, banks could struggle…

And this could be made even worse with the rise of finance been done through paypal, through square, and with the rise of pure online banks like SoFi. I think it’s for these reasons and probably a few more why Buffett’s letting go of bank stocks big time…

But don’t forget that Warren Buffett is what’s known as a value investor. An investor who looks for cheap prices relative to the actual value of the stocks. And you could argue that right now, the valuations of stocks are the opposite of what value investor likes. A value investor likes low prices, and right now prices are high.


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