Warren Buffett's annual meeting may explain surprising moves in his stock portfolio

Published Thu, May 2 202411:01 AM EDTUpdated Fri, May 3 20249:05 AM EDT

Warren Buffett's loyal watchers will hear from the investment guru at Berkshire Hathaway 's annual meeting this weekend, where the 93-year-old icon may explain some of the recent moves in his giant equity portfolio. This year's so-called "Woodstock for Capitalists," held in Omaha, Nebraska, will be exclusively broadcast and livestreamed by CNBC . Our special coverage will begin Saturday at 9:30 a.m. ET. Trimming Apple One surprising move from the conglomerate was selling about 10 million Apple shares (just 1% of its massive stake) in the fourth quarter. At the end of 2023, Berkshire owned 905,560,000 shares of the iPhone maker, worth more than $174 billion and taking up more than 40% of the portfolio. The move took many by surprise because Apple has been Buffett's favorite stock for years, and he even called the tech giant his second-most important business after Berkshire's cluster of insurers. The last time Buffett trimmed the Apple stake slightly was in the fourth quarter of 2020, and the Oracle of Omaha admitted then that it was "probably a mistake." While only Buffett can tell us what prompted the move, here are some possible explanations: Firstly, Apple's stock was getting too expensive. It gained a whopping 48% in 2023 as megacap tech shares led the market rally. At its peak, Apple ballooned in Berkshire's equity portfolio, taking up 50% of it. Secondly, it could be Buffett's investing deputies Todd Combs and Ted Weschler who trimmed the stake to fund other purchases. A regulatory filing revealed a similar move in late 2018, and Buffett's assistant Debbie Bosanek explained that "one of the managers other than Warren had a position in Apple and sold part of it in order to make an unrelated purchase." Berkshire began buying Apple stock in 2016 under the influence of one of his managers. Secret bank stock? There's a chance that Buffett at the annual meeting will reveal the identity of the mystery bank stock that Berkshire has been buying for two quarters straight . In the third and fourth quarters of 2023, Berkshire requested that the Securities and Exchange Commission keep the details of one or more of its stock holdings confidential. Many speculated that the secret purchase could be a bank stock as the conglomerate's cost basis for "banks, insurance, and finance" equity holdings jumped by around $2.37 billion. It's relatively rare for Berkshire to request such a treatment. The last time it kept a purchase confidential was when it bought Chevron and Verizon in 2020. Siri tracker The Berkshire Hathaway CEO might also get asked about the aggressive buying of Liberty Media's tracking stock for New York-based satellite radio company SiriusXM. The Omaha-based conglomerate has been building the stake in a likely merger arbitrage play for a few months. Most recently, a filing revealed that Berkshire bought more of these shares just this week —311,637 shares of LSXMK at an average price of $25.47 apiece. Berkshire now owns over 70 million of the Liberty Media Corp. Series C shares. In December, Liberty Media said it would simplify the ownership structure by combining the two tracking stocks with the rest of the radio company, with the new combination trading under the ticker SIRI. Under the terms of the deal, expected to close early in the third quarter, each Liberty Media Sirius tracking share will be exchanged for 8.4 "new" SIRI shares, while "old" SIRI shareholders would receive new shares in a one-for-one exchange. Paramount There might also be a question about Berkshire's likely losing bet on Paramount at the gathering given the recent drama at the entertainment company. On April 29, Paramount Global announced that CEO Bob Bakish is stepping down and will replaced by three executives in what the company called the "Office of the CEO." Bakish's exit comes as Paramount continues merger talks with Skydance. Even with a buyout offer, Berkshire's bet still might not be profitable. The conglomerate already trimmed its stake by about a third in the fourth quarter. Buffett has expressed pessimism about the streaming industry , saying there are too many players seeking viewer dollars, causing a stiff price war. "You need higher prices, or it doesn't work," Buffett said at Berkshire's 2023 annual meeting. "You've got a bunch of companies that don't want to quit. And who knows what pricing does under that. But anybody who tells you that they know what pricing will do in the future is kidding themselves."