Warren Buffett Has Been Selling Apple and Bank of America Stock and Piling Into This High-Yield Investment Instead

Core Viewpoint - Warren Buffett is strategically positioning Berkshire Hathaway's portfolio ahead of his retirement in 2025, focusing on high-yield investments and reducing stakes in major holdings like Apple and Bank of America [1][2]. Group 1: Portfolio Adjustments - Buffett has sold nearly 70% of Berkshire's stake in Apple since late 2023, despite it being the largest position in the portfolio [4]. - The valuation of Apple has increased significantly, with a current forward P/E ratio above 33, compared to around 10 when Buffett first invested [5]. - In the case of Bank of America, Buffett has reduced his stake to less than 60% of its peak, capitalizing on the bank's increased valuation amid the Federal Reserve's interest rate easing [7][8]. Group 2: Investment in Treasury Bills - As of the end of Q3, Berkshire Hathaway holds $320.5 billion in U.S. Treasury bills, reflecting a consistent increase from $310.6 billion in Q2 [11]. - The interest rates on these T-bills are relatively high, exceeding 3.8%, which aligns with Buffett's preference for safety over yield in short-term investments [12]. - Despite a preference for equities, the current yield from stocks does not significantly surpass that of T-bills, leading to a cautious approach in deploying cash [13][14]. Group 3: Future Opportunities - Buffett's recent investment of $9.7 billion in Occidental Petroleum's OxyChem subsidiary indicates a selective approach to acquisitions, with a need for more similar opportunities to fully utilize Berkshire's cash reserves [15][16]. - Incoming CEO Greg Abel will have substantial capital available for potential deals, providing a strong foundation for future growth [16].