How Warren Buffett’s Early Sell-Off Cost Berkshire $40 Billion in Missed Gains

Warren Buffett has reportedly missed out on nearly $40 billion in potential gains after significantly trimming Berkshire Hathaway’s holdings earlier in 2024.

Buffett reduced Berkshire’s investments by about $127 billion, notably selling around $100 billion in Apple shares and cutting $10 billion in Bank of America holdings.

The Apple sales alone cost Buffett approximately $20 billion in missed profits. Factoring in Berkshire’s gradual exit from U.S. banking stocks, including Bank of America, JPMorgan Chase, Wells Fargo, and Goldman Sachs, the company has foregone another estimated $20 billion in gains.

Despite these missed opportunities, Buffett has stockpiled a massive $311 billion cash reserve, positioning Berkshire to make substantial investments if market conditions align with the CEO’s strategic approach.

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Over the past five years, Berkshire Hathaway’s returns have closely matched those of the S&P 500, and this year, its stock has climbed by 27%. KBW analyst Meyer Shields suggests that the Trump administration’s push for economic expansion could positively impact Berkshire’s noninsurance businesses. While Buffett’s eventual succession may not impact daily operations, it will likely shift investor perception given his legendary status in the investing world.

Kostadin Dimitrov