Warren Buffett is selling stocks like Apple because he sees trouble ahead – but he'll spend if markets crash: elite strategist

• Warren Buffett is selling stocks because he is high on the market, Paul Dietrich told BI.

• Berkshire Hathaway's CEO will step in as soon as a crash or recession occurs, the strategist said.

• Berkshire cashed in on stocks like Apple last quarter, boosting its cash pile to a record $189 billion.

Warren Buffett is cashing in on stocks like Apple because he knows the good times won't last long, but he'll spend big when disaster strikes, a veteran strategist says.

“He is selling one of the most overvalued stock markets in history at its highest point, and as soon as there is a serious correction or recession, I am sure he will, as he always does, put these assets back into the market.” much lower prices,” Paul Dietrich told Business Insider.

B. Riley Wealth Management's chief investment strategist referred to Buffett's Berkshire Hathaway sales of more than $17 billion of shares on a net basis last quarter – the biggest three-month sale in years.

Berkshire has offloaded 13% of its capacity monstrous effort at Apple, which accounted for virtually all sales.

The conglomerate's divestitures increased its cash and government bond holdings by $21 billion to a record $189 billion. Buffett predicted that the mountain of money would do just that more than 200 billion dollars by the end of June.

The famed investor sees no problem holding on to that much cash given the circumstances, he said at Berkshire's annual shareholders meeting on May 4: “When I look at the alternative of what's available in the stock markets, and I look at the makeup of what's happening in the world, we find it quite attractive.”

Dietrich told BI that he has been a Berkshire investor for more than 30 years and that most of his client portfolios include Berkshire stock. He has also read all of Buffett's annual reports and many articles and books about him.

Dietrich underlined that as a value investor, Buffett values ​​underpriced assets and avoids expensive assets.

“He does what he always tells other investors to do,” he said. “It's the advice your grandmother gave you as a little boy: 'Buy low and sell high.'”

“You don't have to be a brain surgeon to know that the past few months have been the right time to sell the stock market and ride the high.”

High prices and different sellers

The benchmark S&P 500 stock index is up 26% over the past twelve months, and 73% since the start of 2020, to trade at a record high. Apple, which remains by far Buffett's largest stock position, has more than tripled in value since he finished building the position in 2018.

The story continues

Dietrich pointed out that some of the richest shareholders in the world, including Amazon Jeff BezosJPMorgans Jamie DimonMetas Mark Zuckerbergand the heirs to the Walmart fortune – have been selling shares in their companies in recent months, indicating they think now is a good time to spend money.

Buffett may get out while things are going well, but he'll be ready to get back in when everyone else is running, Dietrich said.

The investor has repeatedly underlined the value of a huge cash reserve not only to weather tough times, but also to make deals on attractive terms and pick up cheap assets during recessions.

Buffett famously made lucrative deals with a host of companies during the Great Recession Goldman Sachs, General Electric, Mars, Harley DavidsonAnd Dow Chemistry.

It's worth noting that Dietrich has been warning about a devastating downturn For some time now, the stock market and economy have defied his view and that of other commentators. gloomy predictions for years.

Read the original article Business insider