Warren Buffett played stock market defence in Q4. Here are his top moves

Three months ago, his 13F filings showed exit positions in seven companies including General Motors (NYSE: GM), Johnson & Johnson (NYSE: JNJ) and Procter & Gamble (NYSE: PG) as well as reduced exposure to seven more including Amazon (NASDAQ: AMZN) and HP (NYSE: HPE). While these were never huge holdings to begin with, Buffett was a net seller of about $5.3 billion.

The Oracle of Omaha wasn't a big buyer of stocks in the December quarter and understandably so, as the S&P 500 was surging off October low and finished the quarter up 11.5%.

Berkshire’s 13F Summary

The below data was obtained from Whalewisdom:

• Market value – US$347 billion versus US$313 billion in the previous quarter
• New purchases – 0 stocks
• Additional purchases – 3 stocks
• Sold out of – 4 stocks
• Reduced holdings in – 3 stocks
• Top 10 holdings – Account for 92.9% of the portfolio from 91.9% in the previous quarter
• Top 10 holdings – Held for an average of 31.2 quarters

Top Five Holdings

Big Cuts: Apple, HP and Dr Horton

The first Apple trade was made in the first quarter of 2016. Buffett has since bought shares 13 more times and sold on six occasions. Berkshire owns approximately 5.8% of outstanding Apple stock.

The conglomerate sold off the majority of its position in HP, offloading approximately 80 million shares, with around 23 million shares remaining.

Buffett introduced three homebuilder stocks to the portfolio in the June quarter of 2023. This included:

• Dr Horton (NYSE: DHI)
• NVR (NYSE: NVR)
• Lennar Group (NYSE: LEN)

Berkshire sold its entire Dr Horton stake worth around US$700 million by year-end. Homebuilders have performed strongly over the past 18 months thanks to supportive construction trends and peak interest rates. Dr Horton's shares rallied around 25% in the second half of 2023. But they sold off 9.2% following the release of its quarterly result on 22 January 2024. The result beat quarterly revenue and earnings expectations but forward-looking orders fell short of sky-high expectations.

The exit out of Dr Horton may imply either i) homebuilders are overvalued and expectations are far too high or ii) tailwinds for homebuilders are beginning to fade.

Classic Buys: Chevron and Occidental

The conglomerate added 15.8 million shares or US$2.3 billion worth of Chevron after four consecutive quarters of selling (4Q22 to 3Q23). During this time, Berkshire sold around 55.2 million shares.

Buffett's fondness for Occidental Petroleum is truly unwavering. Berkshire owns approximately 27.8% of the company and made its first trade back in the third quarter of 2019. He added $1.1 billion worth of shares in the recent quarter.