Warren Buffett is GETTING OUT!

Hey guys, welcome back to the channel! In this video, we're going to be looking at everything that Warren Buffett bought and sold in the last quarter. Of course, the 13F's are out, so now we actually get to have a look at all of the stock market moves that Warren Buffett and a lot of big money managers actually made during last quarter.

So let's have a look! For Warren Buffett, of course, Berkshire Hathaway's portfolio this quarter is now worth $202.4 billion. They had a very good quarter; after last quarter, it's rebounded up from $175.5 billion. However, despite this strong rebound for his portfolio, he was still a net seller of stocks in Q2. So he's definitely doing more selling at the moment than buying.

If we have a look at the change in his portfolio due to his buys, it increased the portfolio by 0.65%. However, when you look at the cells, it reduced his portfolio size by 6.95%. As you can see, Berkshire added to four positions, they added one brand new position, but they also had 10 reductions. And look at this: it's very unlike Warren Buffett. He sold out completely of seven positions, which is very, very unlike Warren Buffett. But with that said, let's get stuck into it. These are all the trades that Warren Buffett made in Q2 2020.

So first up, let's start off with the brand new buy by Warren Buffett by Berkshire Hathaway for Q2. There was only one of them, and if you want to learn about this company more, if you want to learn more of the reasons behind this purchase, then definitely check out the video I made a couple of days ago. Links are coming up on the screen right now that will take you straight over to that video if you want to learn about this particular investment in more detail because I'm just going to skim over it.

For this investment, they sunk about $500 million into a big gold mining company called Barrick Gold. However, with that said, it wasn't a particularly large investment for Berkshire Hathaway because after they bought in, this position only represents 0.28% of Berkshire Hathaway's stock portfolio. So it's a very, very small buy.

Now, why did Berkshire Hathaway decide to buy into a gold miner? Well, you know, buying gold typically, investors do it because it is seen as that store of value when economic times get really tough. Now, it's true Berkshire didn't actually buy physical gold; they bought into a gold miner. However, with that said, it's still kind of doing the same thing because, of course, the returns and the stock price of that gold miner are going to heavily depend on whatever the price of gold is.

Now, what's really interesting is that a couple of people left this comment on my previous video because this investment was actually really, really teeny for Berkshire Hathaway. Then, it might not have actually been Warren Buffett that made that investment because, of course, we've got to remember that Ted and Todd, they also managed $10 billion each of Berkshire Hathaway's money. And it's only 0.28% of the portfolio right now.

What's very interesting—and I have to thank Investing with Tom for pointing this out—is that Ted and Todd both manage about $10 billion each, and the position size in Barrick Gold is about $500 million. Conveniently, $500 million is 5% of $10 billion, and a lot of investors around the world, top investors, like to keep around 5% of their portfolio in gold when times get tough. So it's kind of a bit coincidental; it might actually be the case that Todd and Ted actually made one of those, two guys actually made this investment, and it wasn't Warren Buffett.

However, there's also the other opinion in this case that, well, maybe Warren Buffett actually is warming to the idea of gold and potentially he was just making—he was just starting to invest in this company right towards the end of the quarter. So by the end of the quarter, the position was only 0.28% of his portfolio, but there is a potential that he's still got, you know, six, seven weeks after the end of the quarter, but before the 13F's come out, that maybe he's continued to buy to build up a larger position before, of course, everyone else gets to know about what he's been buying, and then the Buffett effect kicks in.

I know that that is very much the opinion of Peter Schiff; he's been talking about that recently. But I guess we'll just have to wait and see on this one. We'll just have to wait and see what comes out of next quarter's 13F filing.

So anyway, moving on to the additions for Berkshire Hathaway. They added shares for Liberty's Sirius XM Series C. They added 40% to their position there. Store Capital Group, they added 31%. Suncor Energy, they added 28%. And for Kroger, they added 15%. But I’m not going to get too tied down talking about these stocks just because if you actually have a look at their weight in the portfolio, they are very, very small, insignificant investments in the grand scheme of things for Berkshire Hathaway.

Anyway, with that said, let's move on to their cells, and this is where things really start to get interesting because it is very unlike Warren Buffett to sell out completely of seven different positions in one single quarter. That is remarkable! Usually, you might see one or potentially two complete sellouts, but you wouldn't see seven. Seven is really up there.

Anyway, so the first four we already knew about; we knew from, of course, Berkshire Hathaway's annual shareholder meeting that was held maybe a month or two ago, that Warren Buffett decided to sell his positions in the four big US airline companies—Delta, Southwest, American Airlines, and United. He completely sold out of all four of those positions, and his reasoning for doing so was quite simply that the world has changed for the airlines.

Right? We know that they've been hit; they've been absolutely decimated by the lockdown. Because of that, they've had to take on a lot of debt, and of course, debt—it's not free; you have to pay it back plus interest. And from Warren Buffett's perspective, that situation took a lot of the benefits of being a long-term shareholder in these businesses away.

It's obviously changed in the fact that their four companies are each going to borrow, you know, perhaps an average of at least $10 or $12 billion each. You have to pay that back out of earnings over some period of time. I mean, you're $10 or $12 billion worse off if that happens, and of course, in some cases, they're having to sell stock or sell the right to buy a stock at these prices, and that takes away from the upside.

So he thinks that the situation or his excitement around the airlines as long-term investments has definitely dissipated because of this massive debt situation. He admits that he made a mistake with the airlines, and this is by far the biggest contributor to his cells for the quarter. He sold out of all four of his positions in each of the airlines.

Now moving on, he also sold out of Restaurant Brands International, which is a big fast-food holding company that owns Burger King and Tim Hortons and Popeyes. Now, I'm not actually too sure about this company; I haven't looked into it. I'm not sure about the reasons for selling, but I mean, when I think about fast food and restaurants, I really don't see Warren Buffett's style investments in the restaurant industry, particularly in the fast food industry. It is obviously very, very difficult to build a strong and durable economic moat.

There's obviously just a truck ton of competition. Okay, there are so, so many options when it comes to fast food and restaurants, and usually, especially with fast food, fast food companies are definitely competing on price because, of course, it's just fast food. So in that instance, they can sometimes squash your margins, because you know, even if you raise your prices by even two, three, four dollars, which doesn't actually seem like that much, that can make the world a difference. For a fast food company, you can lose customers very quickly as you know a McDonald's or a KFC or whatever keeps their prices very low. You know, you can lose a lot of customers just by having fast food that's a little bit too expensive.

So overall, that's why I don't really see fast food and restaurant companies as being right in kind of Warren Buffett's kind of investment strategy. But there you go; he has sold out of Restaurant Brands International. But now let's move on to the other really big news story that's come out, of course, from Warren Buffett's 13F filing, and that is that Warren Buffett, Berkshire Hathaway, are reducing their positions in the U.S. banks.

So Warren Buffett now completely sold out of Goldman Sachs, which is of course a big U.S. bank, but he's also reduced his position quite substantially in his other bank holdings. So if we have a look, he reduced his JP Morgan position by 62%. PNC Financial Services down by 42%. He reduced M&T Bank by 16%. Bank of New York by 9%. U.S. Bancorp by 0.3%. So Buffett is definitely lightening the load on the U.S. financials. He wants less exposure to the U.S. banks.

Which is just crazy, you know? This quarter is so un-Warren Buffett-like. He's buying gold or he's buying a big gold miner; he's selling U.S. banks. I mean, this is so crazy because Warren Buffett, so many times on the record, he's come out and says that he believes in the big U.S. banks. It's like, well, what? You just don’t right now.

So is this Warren Buffett predicting or trying to protect Berkshire's portfolio from the potential of really tough economic times coming up in the not too distant future? I don't know; it's a pretty interesting topic to debate because there's also the other side of the coin—there's another side to the story that I've seen. I've been reading about online is there's the potential that Warren Buffett was simply reducing his positions in the U.S. banks to make sure his positions stay comfortably under 10% ownership in the company.

Because once Berkshire Hathaway owns more than 10% in a few banks, they are considered a bank holding company. And if that happens, then all of a sudden they have to comply with so many more restrictions and regulations by the SEC on what business operations Berkshire Hathaway can and can't even carry out and operate in. So there was a decent point made that I was reading about that maybe he's just selling to stay comfortably under 10% ownership in each of these banks.

However, again, on the flip side of that, when you actually look at his ownership percentage in each of the banks, there really wasn't any that were close to getting over 10% even last quarter. And now, after he's reduced this quarter, he's really gone quite a way away from owning 10% in a lot of those banks. So there really didn't seem to be much danger of him tipping over the 10% mark.

And in the one bank, Bank of America, where he does own more than 10% of that company, he didn't reduce Bank of America stock in that quarter to slip under 10%. He kept his investment the same, and since the end of the quarter—so since late July, he's actually sunk $2 billion more into Bank of America. So he's increased his position.

So you kind of start looking at that hypothesis. Plus, when we're thinking about the gold investment, there's also the potential that because it was such a minuscule investment, maybe it wasn't even Warren Buffett. Maybe it was Ted and Todd. And maybe Warren Buffett is actually still a big believer in, you know, the U.S. financial system. Maybe he's not even touching gold, and maybe he's still quite bullish on banks.

Maybe he's not. This is why it's just been really hard for me to try and get a clear picture and really understand what Warren Buffett is trying to do by looking at this quarter's 13F filing from Berkshire Hathaway. Because, you know, on the one hand, you've got what it seems like on the surface level. You've got Warren Buffett buys a big gold miner, sells down U.S. banks. You know, Warren Buffett must be expecting or lowering his exposure to the idea that we're going to have very poor economic conditions in the next little while.

But then on the other hand, we've got the idea that maybe Buffett didn't have anything to do with that gold purchase. Maybe he's just selling the banks to keep himself well and truly under 10%. Maybe he thinks all is well. Is this—we're really reading too much into this? I just can't quite tell. So you can see why this is a tough one to understand, and I'd love to hear your opinion below as well.

So make sure you let me know: do you think that Warren Buffett is, from these results, showing us that, yeah, he thinks that there's doom and gloom on the horizon? Or do you think that really there's nothing to worry about? You know, he's just sliding under 10% with the banks; he really didn't have anything to do with the gold investment, Warren Buffett still thinks, as Warren Buffett always has.

I'd love to hear your opinions, so let's see, you know, what the general consensus is. Drop that stuff down in the comments section below; I'd love to hear from you guys. Anyway, moving on, we've just got a couple more just to quickly touch on to round out all of the buys and sells that Buffett did or Berkshire did in the most recent quarter.

Buffett also reduced in Visa and Mastercard, he reduced in Charter Communications, which is a telecommunications company, and he reduced in Sirius XM Holdings. And also, the one that I didn't mention earlier is that Buffett also sold out completely of Occidental Petroleum.

So overall, that is Warren Buffett's 13F. That was his quarter, all of his buys, all of his cells. Man, what a confusing one! So yeah, definitely let me know what you think because I'm definitely on the fence; I don't know which way I swing at the moment because there are pretty strong points on both sides.

Anyway, that is it from me for today, guys! Thanks very much for watching. Make sure you leave a like on the video if you did enjoy it or if you found it useful. Subscribe to the channel, as always, if you'd like to learn more about the way that I go about my investing, either passive investing ETF style or active investing Warren Buffett style value investing.

Then check out the links down in the description. Head over to Profitful, check that out. You can support the channel by checking out those courses, so I super appreciate it. But apart from that, that's it for me, guys! Thanks very much for watching, and I'll see you all in the next video!