warren buffett

Berkshire Hathaway (NYSE: BRK.B) chairman Warren Buffett has sold most of the Taiwan Semiconductor Manufacturing Co. (NYSE: TSMC) shares within a quarter of acquiring the stake.

Berkshire took the position in only Q3 2022. However, the firm’s Q4 2022 13F which was released yesterday showed that it has sold over 86% of the TSMC shares and held only 8.29 million shares at the end of 2022. It is quite possible that in the typical Buffett way, the conglomerate sells the remaining shares also in the current quarter.

Buffett touted as among the best value investors of all time preaches and mostly practices a buy-and-hold investment strategy. Some of Berkshire’s top holdings like Coca-Cola, American Express, and Bank of America have been in the portfolio for decades.

That said, over the last few years, Berkshire had quickly exited some holdings. For instance, in 2019, it sold Oracle shares a few months after the purchase. In 2020, Berkshire Hathaway bought Barrick Gold which again it sold in a couple of quarters.

In 2020 only, as the world was grappling with the COVID-19 pandemic, Buffett added stakes in pharma companies like Pfizer, Merck, and AbbVie.

Warren Buffett Trimmed TSMC Shares in Q4 2022

It has since exited the pharma companies. Buffett also sold its stake in Verizon last year where again the holding period was much lower than what we generally associate with him.

TSMC joins the long list of companies where Buffett has had a change of heart shortly after buying the initial stake. There is a guide on how to buy TSMC stock.

Here it is worth noting that some of the transactions could have been made by Buffett’s deputies Todd Combs and Ted Weschler who also manage the investments. However, the big-ticket transactions are still made by the Oracle of Omaha himself.

Key Takeaways from Berkshire Hathaway’s Q4 2022 13F

During Q4 2022, Berkshire also trimmed stakes in several banks. The company sold 60% of its stake in Bank of New York Mellon and 90% stake in US Bancorp. Over the last two years, Berkshire has fully exited financial companies like JPMorgan, Goldman Sachs, and Wells Fargo.

The conglomerate however increased its stake in Bank of America and also added a new position in Citigroup last year. Based on the valuation multiples like PE ratio and price-to-book value, Citigroup is among the most undervalued bank stocks. There is a list of companies that look undervalued.

Berkshire also trimmed its stake in Activision Blizzard and Chevron in Q4 2022. The company bought Activision Blizzard shares as an arbitrage play after the merger news with Microsoft.

The merger meanwhile looks in troubled waters amid regulatory hurdles.

Meanwhile, Berkshire also sold some shares of McKesson, Ally Financial, and Kroger in Q4 2022.

Here’s What Warren Buffett Bought in Q4 2022

In Q4 2022, Warren Buffett added another 20.8 million Apple shares valued at $3.2 billion. The conglomerate now holds 5.8% of the company and is the second largest stockholder behind Vanguard.

Notably, Buffett bought Apple shares in Q1 2022 and Q2 2022 also. Before that, he did not buy any shares since Q3 2018. On the contrary, the legendary value investor sold some shares over the period, which he later admitted was a “mistake.”

Apple stock slumped 27% in 2022 and underperformed the S&P 500. It was, however, the best-performing FAANG stock of the year and the only stock from the group which outperformed the Nasdaq Composite.

2022 was a tough year for gadget makers and ancillary industries as both PC and smartphone sales tumbled. Apple meanwhile retained the top spot and outperformed other smartphone companies.

Berkshire Hathaway Increased its Stake in Apple

According to the preliminary data from the IDC (International Data Corporation) global smartphone shipments fell 18.3% YoY to 300.3 million units in Q4 2022. In the full year, smartphone shipments fell 11.3% to 1.21 billion units.

The IDC report added that Apple retained its top position among smartphone companies. and if anything, its market share rose to 24.1% in Q4 2022 as compared to 23.1% in the corresponding quarter in 2021. Samsung also retained its second position and its market share also rose from 18.8% to 19.4%.

Buffett has praised Apple and its CEO Tim Cook multiple times. A couple of years ago, he shifted to an Apple iPhone while ditching his old flip phone.

Coming back to Berkshire’s Q4 13F, the conglomerate also added shares of Paramount Global and Louisiana-Pacific.

All said the two key surprises from the company’s 13F filing are the surprise trimming of the TSMC stake and the nominal sale of Chevron shares. Buffett was buying energy stocks as early as the third quarter of 2022.

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