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2 Great Stocks Warren Buffett Just Sold

By Matthew Frankel, CFP® - Mar 5, 2021 at 6:33AM

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Just because Buffett sold shares of these two companies doesn't necessarily mean you should.

We recently got a look at the moves Warren Buffett and the rest of Berkshire Hathaway's (BRK.A 0.79%)(BRK.B 0.80%) investment team made in the fourth quarter of 2020. While the conglomerate reduced or sold all of several stocks, two in particular stood out as odd stocks to sell. In this Fool Live video clip, recorded on Feb. 22, contributor Matt Frankel, CFP, and Industry Focus host Jason Moser discuss the surprising reductions in Berkshire's Apple (AAPL 3.06%) and General Motors (GM 2.38%) stock positions. 

Jason Moser: Well, what about these stocks that they reduced their positions in? I don't know, honestly, I was a little bit surprised at some of these names. Anything standout to you?

Matt Frankel: Well, the big one was Apple, and I'm not really surprised about that.

Moser: No? That actually did surprise me a little.

Frankel: Well, Apple has grown to the point in Berkshire's portfolio where it's like a quarter of the company's market cap. Pretty soon, they're going to change their names to Berkshire Apple Holdings or something like that. They sold a little over $7 billion worth of Apple stock. That's a pretty big chunk.

Moser: It is.

Frankel: But it's still the company's biggest stock position by far.

Moser: Right.

Frankel: It seems like a matter of diversifying and rebalancing, like you would do in your 401(k).

Moser: Yeah. Portfolio management, that's what it sounds like.

Frankel: Yeah, regardless of what you think of the Apple investment, Buffett is not a guy to let 50% of his assets be in one thing, even if that's Apple. I'm not that big of a fan of that move, but I get it. The financial ones weren't a surprise. He's pretty much been selling every bank except Wells Fargo (WFC -0.17%) for a while. Not except Wells Fargo, except for Bank of America (BAC -0.11%). He sold Wells Fargo. That's where I got tongue-twisted there. He sold almost $3 billion more of his Wells Fargo stake. Now, Berkshire went from owning a little under 10% of Wells Fargo to less than 1% of the bank.

Moser: Wow.

Frankel: Over the past few quarters, he's been paring that went down for some time now. The big one that really stood out to me as a surprise was General Motors. That he sold, not a bunch of it. Berkshire still owns a good deal of General Motors stock, but they sold a good chunk of it. Berkshire owns about 5% of GM.

Moser: You feel like he's thumbing his nose at you, Matt. I remember reading your takes on GM recently, that's your EV pick.

Frankel: Maybe, and Wells Fargo. He's just going against me on all sides of the business.

Moser: What's the deal with that?

Frankel: [laughs] I don't know why he decided to sell some GM. I'd like to know the answer to that question because I honestly can't figure it out.

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Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
$148.18 (3.06%) $4.40
Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
$472,494.28 (0.79%) $3,689.24
Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
$314.99 (0.80%) $2.49
Bank of America Corporation Stock Quote
Bank of America Corporation
$36.63 (-0.11%) $0.04
Wells Fargo & Company Stock Quote
Wells Fargo & Company
$45.52 (-0.17%) $0.08
General Motors Company Stock Quote
General Motors Company
$38.31 (2.38%) $0.89

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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