Warren Buffett has just bought or sold these 4 stocks. What should I do?

Every quarter, Warren Buffett’s investment company (Berkshire Hathaway) should report changes in the portfolio. It gives great insight into what legendary investors are buying or selling. Filing for the last quarter of 2022 recently, Buffett made some interesting changes. This is the information I was looking for.

Some great pieces

One of the most surprising moves was the sale of a large portion of his stock Taiwan Semiconductor. He cut 86% of the shares he owned in the company. This position only started in Q3, so Buffett bought and sold this in a few months.

The submission does not provide a detailed reason as to why the action was taken, so I will have to fill in the blanks myself. It is not uncommon for Buffett (which makes him a long-term investor) to exit after a short period of time.

It may have to do with concerns around China more broadly. Or given their overall portfolio, they may feel that they are heavily involved in electronics and technology, especially given the size of their holdings Apple stock.

Buffett also reduced stakes in some financial services stocks. This includes selling US Bancorp and BNY Mellon sharing.

Still buying Apple

Warren Buffett clearly didn’t read my article I published earlier this year when I explained why I thought he was too bullish on Apple. In fact, thanks to acquisitions through subsidiaries during the quarter, he added another 334,000 shares of Apple.

This ultimately means that Apple is the largest shareholder of the business, accounting for 5.8% of Apple’s total shares available. Given that Apple’s market capitalization is $2.46trn, that’s a huge amount!

My take from the news

Right off the bat, I wouldn’t follow Buffett by buying (directly or indirectly) from Apple. It’s not that I don’t like the business, but I feel that he is not diversified enough in his portfolio. As a result, a lower swing in a stock’s price can wipe out all the gains from other stocks.

Regarding Taiwan Semiconductor, I don’t agree with them either. The stock has been on my watch list for the past few months since I found out that Buffett had bought it. I don’t see anything wrong with the company. In fact, with China now reopening and supply chain issues easing, I think business will do well next year. Consequently, I am thinking about buying it.

I respect great investors, with track records for profits that exceed mine. But this speaks to one of the main themes of being an investor. It’s all subjective. I can think stocks are going up when other people think they are going down. That allowed them to sell the shares and I could buy them. It seems that the stock market is functioning efficiently.

I’ll check with Buffett this summer and see if that’s true!