Key Points:

• Warren Buffett sold half of his Apple stake and now holds $277 billion in T-bills, earning $12-13 billion annually in interest.
• His move suggests he sees limited value in the current market, with stocks potentially overvalued.
• Buffett’s recent actions imply he might be anticipating a serious market correction.
• As good as Treasury bills are, the 2 dividend legends to buy and hold forever are likely much better. Unlock both by clicking here now.

Lee and Doug discuss Warren Buffett’s recent financial moves, highlighting that he now holds $277 billion in T-bills, which is more than the Federal Reserve’s current holdings. They note that Buffett’s decision to significantly reduce his Apple (NASDAQ: AAPL) stake and increase his T-bill holdings, which yield around 5%, suggests he may not find anything in the market worth buying at current prices. This could indicate that he believes the market is overvalued. They also mention that Buffett’s only recent significant investment has been in Chubb (NYSE: CB), a large insurer, and speculate whether Buffett is preparing for a serious market correction. They consider the possibility that Buffett’s actions reflect both a lack of attractive investment opportunities and concerns about an impending downturn.

Transcript:

Warren Buffett has more of something than the Federal Reserve.

You want to walk us through how that only Warren Buffett could do this.

It’s like he’s like a nation.

He is a nation.

He is a financial nation.

As was widely broadcast in the second quarter, in through June, he just absolutely brought the hammer to his Apple stake to the tune of selling half of it.

And it’s still the biggest position in Berkshire Hathaway by a large margin, but he dumped a ton.

And now he has $277 billion in T-bills.

And, you know, T-bills are everything up to a year is yielding 5%.

So do the math real quick.

He’s making $12 to $13 billion a year in accrual income on treasury debt.

I’m going to give you my theory.

When people start to put money into something that yields four or five, six percent, it means there’s nothing else out there they like to buy.

I mean, Buffett’s habit says he’s considered the smartest investor in the world.

He looks for things that he thinks have value, more than the way he’s thought his whole career.

That tells me that with all this money, he’s constantly shopping, that he’s not finding anything.

He has to buy something that’s elephant-sized to make a dent in his balance sheet.

It tells me that everything he’s looking at is too expensive.

Yeah, and at this juncture, the only meaningful new stake he’s taken in a while is Chubb, you know, the giant insurer.

So it’s like, uh, what is he going to do with this?

Because and what’s, what’s he worried about?

I mean, you know, he was, he was really staunch about holding that Apple because his favorite, you know, long term hold is forever.

And he sliced that, and he sold a bunch of Bank of America, which he’s held for years.

So my question is, A, what’s he looking for?

But B, what’s he worried about?

Does he see a really serious correction coming?

I think he does.

Well, you know, it’s, it could be two things that are linked.

He may think everything in the stock market, every publicly traded company or a lot of them are overvalued where it is right now.

Yeah.

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