{"id":10633,"date":"2022-08-18T20:34:30","date_gmt":"2022-08-19T01:34:30","guid":{"rendered":"http:\/\/blog.jlbn.net\/?p=10633"},"modified":"2022-08-18T20:34:31","modified_gmt":"2022-08-19T01:34:31","slug":"warren-buffett-finally-throws-in-the-towel-on-4-lousy-stocks","status":"publish","type":"post","link":"http:\/\/blog.jlbn.net\/?p=10633","title":{"rendered":"Warren Buffett Finally Throws In The Towel On 4 Lousy Stocks"},"content":{"rendered":"\n

Warren Buffett likes to say his\u00a0favorite holding period<\/a>\u00a0for an S&P 500 stock is forever. But that’s definitely not the case as he unloads some of his worst dogs.<\/p>\n\n\n\n

Buffett’s Berkshire Hathaway<\/strong> (BRKB<\/a>) sold off a least a portion of its four worst performers this year: Verizon<\/strong> (VZ<\/a>), Store Capital<\/strong> (STOR<\/a>), General Motors<\/strong> (GM<\/a>) and U.S. Bancorp<\/strong> (USB<\/a>). That’s according to an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith<\/a>. Berkshire Hathaway<\/a> retains a portion of the stocks (except Verizon), but now all the positions are below 10% of the companies’ shares outstanding.<\/p>\n\n\n\n

When you see Buffett dump a stock, that’s about the closest thing to him ringing a sell bell. “There is very low portfolio turnover. Buffett didn’t buy a single new stock in the second quarter,” said Whitney Tilson of Empire Financial Research. “Almost all of his trading is generally among his existing positions.”<\/p>\n\n\n\n

Remember: Buffett is an\u00a0avowed value investor<\/a>. When stocks he believes in fall in price, he often buys more. So if you see him dumping them instead, that should tell you something.<\/p>\n\n\n\n

Plenty Of S&P 500 Dogs To Choose From<\/h2>\n\n\n\n

Berkshire Hathaway itself is having a decent year. Shares of Buffett’s conglomerate are up 2.4% this year. That’s a solid showing in a year that the S&P 500 is down nearly 10%.<\/p>\n\n\n\n

But make no mistake, the Oracle of Omaha is struggling too with his investments. Just look at the massive $40 billion loss the company took in the second quarter. And 36 out of Berkshire Hathaway’s 49 U.S.-listed positions, or nearly three-quarters, are down for the year.<\/p>\n\n\n\n

And some of the losses are enormous. Apple<\/strong> (AAPL<\/a>), Berkshire Hathaway’s largest position, is down 2.7% this year, erasing more than $4 billion in value for Berkshire Hathaway’s portfolio. Berkshire Hathaway owns nearly 6% of the smartphone maker.<\/p>\n\n\n\n

Buffett, though, isn’t giving up on Apple. Berkshire Hathaway actually boosted its position in the smartphone maker’s shares by nearly 1% to 894 million shares in the second quarter. And yet, as with other losers, he’s willing to part ways.<\/p>\n\n\n\n

Berkshire Hathaway Cl B<\/strong>\u00a0(BRKB<\/a>)<\/h2>\n\n\n\n

Hanging Up On Verizon<\/h2>\n\n\n\n

Given how T-Mobile US<\/strong> (TMUS<\/a>) is running circles around Verizon<\/a>, it’s not surprising Buffett’s had enough.<\/p>\n\n\n\n

With shares of Verizon down nearly 12% this year, Berkshire Hathaway completely unloaded its remaining 1.4 million shares of the company in the second quarter. The great Verizon sell-off started in the first quarter, when Berkshire Hathaway dumped roughly 99% of its 158 million shares. So much for forever.<\/p>\n\n\n\n

Another dog Berkshire Hathaway is selling off is Store Capital. With shares of the consumer discretionary stock still down nearly 15% this year, Berkshire Hathaway didn’t buy more. Just the opposite: It dumped more than half its position. Now it only owns 2.5% of the company.<\/p>\n\n\n\n

General Motors Company<\/strong>\u00a0(GM<\/a>)<\/h2>\n\n\n\n

No Love For GM<\/h2>\n\n\n\n

Fans of General Motors hold out hope that the U.S. automaker will take on Tesla<\/a> (TSLA<\/a>) in electric vehicles. But GM stock isn’t behaving that way, and Buffett isn’t buying it.<\/p>\n\n\n\n

Shares of GM lost more than a third of their value this year. But rather than buying more, as is Buffett’s typical style, he sold off nearly 15% of it. Now Berkshire Hathaway owns just 3.6% of the company. Meanwhile, Buffett also took 5% off the table in his U.S. Bancorp position. Shares of the bank are down more than 12% this year. It’s important to note, though, that Buffett still owns 8% of the bank.<\/p>\n\n\n\n

Is it possible Buffett will change his mind on some of these stocks later? Absolutely. Berkshire Hathaway has been adding to its Occidental Petroleum<\/strong> (OXY<\/a>) position and now owns 20% of the company. But keep in mind, it dumped the position to zero as of the end of 2021.<\/p>\n\n\n\n

So when you see Buffett running from a falling S&P 500 stock, that’s not a signal you should ignore.<\/p>\n\n\n\n

Losing Stocks Buffett Is Dumping This Year<\/h2>\n\n\n\n

Berkshire Hathaway reduced its position in these stocks that are down this year<\/em><\/p>\n\n\n\n

Company<\/th>Symbol<\/th>YTD price change<\/th>Cut in Berkshire position in Q2<\/th>Sector<\/th><\/tr><\/thead>
Verizon Communications<\/td>(VZ<\/a>)<\/td>-11.9%<\/td>-100%<\/td>Communication Services<\/td><\/tr>
Store Capital<\/td>(STOR<\/a>)<\/td>-14.9<\/td>-53.0<\/td>Real Estate<\/td><\/tr>
General Motors<\/td>(GM<\/a>)<\/td>-33.4<\/td>-14.8<\/td>Consumer Discretionary<\/td><\/tr>
U.S. Bancorp<\/td>(USB<\/a>)<\/td>-12.3<\/td>-5.2<\/td>Financials<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
<\/h5>\n","protected":false},"excerpt":{"rendered":"

Warren Buffett likes to say his\u00a0favorite holding period\u00a0for an S&P 500 stock is forever. But that’s definitely not the case<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[254,3421,3422],"tags":[888,3425,3445],"_links":{"self":[{"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/posts\/10633"}],"collection":[{"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10633"}],"version-history":[{"count":1,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/posts\/10633\/revisions"}],"predecessor-version":[{"id":10634,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/posts\/10633\/revisions\/10634"}],"wp:attachment":[{"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10633"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10633"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10633"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}