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Did Warren Buffett Bend His Rules to Sell Apple?

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Warren Buffett’s investment rules

If you’re an investor, then you must have heard the Oracle of Omaha Warren Buffett’s quote, “Be fearful when others are greedy and greedy when others are fearful.” In general, Buffett prefers to buy stocks when most other investors start selling their long positions in a panic. However, his investment firm, Berkshire Hathaway’s (BRK.B), recent SEC filing on February 14 revealed that Buffett sold Apple (AAPL) shares when most investors were also fearful. Let’s take a closer look.

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Buffett sold Apple shares

In the fourth quarter of 2018, Berkshire Hathaway sold about 2.89 million shares of Apple after buying 522,902 more shares in the previous quarter. The investment firm owned about 249.59 million shares of Apple at the end of the December 2018 quarter.

In the fourth quarter last year, Apple stock fell 30.1%, compared to 14.0% and 17.5% losses in the S&P 500 Index (SPY) and the NASDAQ Composite Index (QQQ)(VTI), respectively. During the quarter, Berkshire’s stake in Apple fell 30.9% to $39.37 billion.

What changed Buffett’s mind on Apple?

While Buffett prefers to be “greedy when others are fearful,” he won’t ignore the fundamentals of a company he has invested in. In the quarter ended December 2018, reports described Apple’s falling iPhone sales in the Chinese market, which led many analysts to lower their future earnings growth estimates for AAPL.

While Apple’s product segment sales are declining, the company has increased its focus on strengthening its services segment.

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