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Is Warren Buffett Anticipating a Market Correction?

By Investing.com (Damian Nowiszewski)Stock MarketsNov 23, 2023 02:44AM ET
www.investing.com/analysis/is-warren-buffett-bracing-for-a-market-correction-200643837
Is Warren Buffett Anticipating a Market Correction?
By Investing.com (Damian Nowiszewski)   |  Nov 23, 2023 02:44AM ET
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  • Berkshire Hathaway's recent 13F filing showed the status of Warren Buffett's latest holdings
  • Apple remains the top holding in the Oracle (NYSE:ORCL) of Omaha's portfolio
  • On the other hand, the company's cash reserves are increasing rapidly raising the question: Is Buffett bracing for a market downturn?
  • Secure your Black Friday gains with InvestingPro's up to 55% discount!

On November 14, the Berkshire Hathaway (NYSE:BRKb) fund submitted its obligatory 13F report to the U.S. Securities Exchange Commission, outlining portfolio details for units trading in stocks valued at over $100 million. The pivotal observation from the presented data underscores unwavering confidence in Apple (NASDAQ:AAPL), maintaining its position as the undisputed leader, constituting 50% of the portfolio.

Additionally, a new cash holding record was set at around $157.2 billion, a notable increase from the previous quarter's $147.4 billion. This substantial cash reserve suggests that the Oracle) of Omaha, Warren Buffet, is gearing up for potential market opportunities amid projections of a U.S. economic slowdown or even recession.

So, What Strategic Moves Have Warren Buffet and His Company Made?

The record cash holdings stem from capital gains, primarily dividends, and the reduction of some positions. In the last quarter alone, $5 billion worth of securities were divested, contributing to a total of $44 billion over the last twelve months. Stocks no longer considered promising include General Motors Company (NYSE:GM), Procter & Gamble Company (NYSE:PG), Johnson & Johnson (NYSE:JNJ), HP (NYSE:HPQ), and Amazon (NASDAQ:AMZN).

The most significant moves were observed in Chevron Corp (NYSE:CVX) with a -10.45% adjustment and complete sell-offs in Activision Blizzard (NASDAQ:ATVI) and General Motors. On the revenue side, noteworthy symbolic purchases include Liberty Media Formula One Corp A (NASDAQ:FWONA), Atlanta Braves Holdings Inc (NASDAQ:BATRA), and Sirius XM Holding Inc (NASDAQ:SIRI).

Earlier this month, the company released its quarterly results, with a positive surprise in both earnings per share and revenue.

Previous Earnings
Previous Earnings

Source: InvestingPro

From the point of view of stock prices, the results supported the demand side, which is confidently heading for an attack on this year's maximums, which are also historical peaks.

Stock Price Chart
Stock Price Chart

The closest support where to look for a place to join the train is within the $373 level for B shares.

Apple Continues to Dominate Berkshire Hathaway’s Portfolio

Warren Buffet's fascination with Apple continues in earnest, as evidenced by the dominance of the US tech giant in the portfolio of the billionaire-led investment vehicle with a score of 50%. This is followed by equally recognized brands such as Bank of America, American Express (NYSE:AXP) and Coca-Cola (NYSE:KO).

Top Holdings
Top Holdings

Source: InvestingPro

The structure of the portfolio shows that the strategy based primarily on mature value-oriented companies is continuing with very good results.

Top Sector
Top Sector

Source: InvestingPro

What will be the next steps of the "Oracle of Omaha"? It's hard to find an answer to this question at the moment, but it's very possible that the next major moves will be made on the occasion of a possible discount sale in the broad market.

Watch Out for a Correction in Apple’s Stock Price

For more than three weeks, Apple's stock price has been moving within a dynamic upward impulse, for which the next target area is the historical maxima located in the price region just below $200. However, the fair value index suggests the possibility of a correction of up to 14%, which would correspond to a rebound near the local support area falling in the vicinity of $164 per share.

Fair Value
Fair Value

Source: InvestingPro

From the point of view of connecting to the uptrend, this would be a favorable situation, which would allow buying at a much better price from the perspective of a continuation of the northward movement.

***

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Disclaimer: The author does not own any of these shares. This content, which is prepared for purely educational purposes, cannot be considered as investment advice.

Is Warren Buffett Anticipating a Market Correction?
 

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Is Warren Buffett Anticipating a Market Correction?

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Comments (13)
Robert Hicks
Robert Hicks Dec 13, 2023 5:03PM ET
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Anything is possible but the bulls are continuing to run thus far. Fed news was very helpful.
JIM VETTER
JIM VETTER Nov 24, 2023 4:27PM ET
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If you're not anticipating a massive market correction you're going to get wiped out
Roberto Jacobus
Roberto Jacobus Nov 24, 2023 12:37AM ET
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Should proof read your AI generated articles, so as not to talk about the “Oracle of Omaha” and reference NYSE:ORCL
Filip dB
Phildb Nov 24, 2023 12:37AM ET
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You re so right
Jimmy Wave
Jimmy Wave Nov 23, 2023 7:58PM ET
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Already been several market corrections
Wayne WONG
Wayne WONG Nov 23, 2023 7:58PM ET
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just wait. the stocks are over-valued. wisely pick up later after a deep correction
Jim Davies
Jim Davies Nov 23, 2023 2:22PM ET
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Buffet buys low and sells high. That makes much sense to me. Those buying now and following the herd remind me of pigs with demons soon running to destruction.
Otis Grant
Otis Grant Nov 23, 2023 2:20PM ET
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Seriously? We literally just had a 3 month long correction that ended barely even two weeks ago.
Sir ByteMe
Sir ByteMe Nov 23, 2023 2:01PM ET
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I have made the mistake of trusting some of articles on https://investing.com and they have, at least fot the moment, been wrong 3 for 3. So….
Otis Grant
Otis Grant Nov 23, 2023 2:01PM ET
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It's all just opinions. Remember that
R2bees
R2bees Nov 23, 2023 12:32PM ET
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Where can I report this article
Colin Hackworth
Colin Hackworth Nov 23, 2023 11:32AM ET
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No offense but he is 98 and no disrespect to his sound history but at 98 no matter what the human brain isn't firing on all cylinders anymore and he's day to day high possibility of dementia diagnosis and you know I'm right!!
Colin Hackworth
Colin Hackworth Nov 23, 2023 11:32AM ET
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My bad 93 but still same conclusion
Jim Davies
Jim Davies Nov 23, 2023 11:32AM ET
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No need to criticize Buffet for your lack of brains since you are likely buying in this oversold and overvalued market.
Otis Grant
Otis Grant Nov 23, 2023 11:32AM ET
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Jim Davies sounds mad because he shorted 4100 now; it's everyone elses fault. What basis do you have to proclaim the entire market overvalued. Like you could even begin to evaluate it.
JIM VETTER
JIM VETTER Nov 23, 2023 11:32AM ET
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Otis, you keep buying and holding. Let's talk in 6 months and see how you're doing
SorsTrade RS
SorsTrade RS Nov 23, 2023 10:55AM ET
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BRKb 373 support? Resistance I think you meant to say....
 
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