Warren Buffett's Berkshire has been a net seller of stocks for 6 quarters in a row. Here's why

Published Sun, May 19 20246:45 AM EDT

Warren Buffett's Berkshire Hathaway has been a net seller of stocks for six straight quarters despite the recent disclosure of a headline-making purchase of a stake in insurer Chubb . The Omaha-based conglomerate reported net sales of over $17 billion in publicly-traded stock in the first quarter, according to the latest 13F regulatory filing. In fact, Berkshire hasn't been a net buyer of stocks since the third quarter of 2022, according to an analysis of filings. The bulk of the first quarter selling came from trimming Berkshire's massive Apple bet by 13% after reaping enormous gains. The Oracle of Omaha suggested that the sale was for tax reasons as he expects corporate tax rates will eventualy rise to help plug a burgeoning fiscal deficit. Meanwhile, it was finally revealed that Berkshire bought nearly 26 million shares or more than 6% of Zurich-based Chubb for $6.7 billion, ending months of speculation over the identity of the secret stock. Berkshire spent nine months building the stake with confidential treatment granted by regulators. By the end of March, the property and casualty insurer was Berkshire's ninth biggest stock holding. Last quarter, the conglomerate slashed its stake in building materials manufacturer Louisiana-Pacific by about 6%. Berkshire also exited its HP stake last quarter. Buffett also dumped his entire position in Paramount at a loss . The 93-year-old investment icon confessed at Berkshire's annual meeting earlier this month that he's open to putting more capital to work, but high-flying prices give him pause. He also said there hasn't been anything as appealing as the bet on Japanese trading houses he made a few years ago. "If I saw one of those now, I'd do it for Berkshire," Buffett told shareholders, referring to his Japanese investment. "You know, it isn't like I've got a hunger strike or something like that going on. It's just that...things aren't attractive." With government bond yields at multiyear highs, the Berkshire chairman and CEO said he finds cash attractive right now compared to risk assets. Buffett has been buying 3- and 6-month Treasury bills yielding more than 5% every Monday at weekly Treasury auctions. For example, the 3-month Treasury bill is currently yielding 5.4% compared to near zero before the Federal Reserve started raising interest rates in early 2022. "I don't mind at all, under current conditions, building the cash position," Buffett said. "I think when I look at the alternative of what's available in the equity markets, and I look at the composition of what's going on in the world, we find it quite attractive." Berkshire's cash hoard reached a record $189 billion in the first quarter, up from almost $168 billion in the fourth quarter. The investment guru said the cash pile could reach $200 billion by the end of June. "We'd love to spend it," Buffett said of Berkshire's cash, "but we won't spend it unless we think [an investment] ... has very little risk and can make us a lot of money."