When the wealthiest people in the world make portfolio moves, investors everywhere take notice. And this past quarter, heavyweights from Warren Buffett to Bill Gates were moving huge stacks of money around. That’s according to the latest batch of 13F regulatory filings – the government paperwork with the best potential investment ideas. Let’s have a look.
So who bought and sold what?
There’s little change at the top of the table, and that’s really no surprise. Across the board, the most popular holdings are mega-huge tech stocks Alphabet, Microsoft, Meta, and Amazon. Not far behind is Buffett’s baby, Berkshire Hathaway, and two financial mainstays Visa and Mastercard, which are consistently well-held by quality-seeking, long-term investors, thanks to their steady revenue growth and market-dominating position.
But that doesn’t mean there weren’t changes. Two of the world’s biggest investment entities actually sold tech stocks last quarter. And these ones are savvy enough to bear watching – the Bill and Melinda Gates Foundation, with its $42 billion invested in US stocks, and Berkshire Hathaway, with $347 billion.
The Gates Foundation raised more than $1 billion from US stock sales in the fourth quarter of 2023, mainly by reducing its stake in Microsoft by 2.7% and in Berkshire Hathaway by 11%. However, it also sold all its holdings in loads of other tech stocks including Apple, Broadcom, Amazon, Applied Materials, Meta, and Booking Holdings. Now, the actual dollar value of each company was small relative to its overall portfolio size – but a reduction to the whole tech sector definitely stands out. It seems strange.
Berkshire Hathaway also reduced its holding in Apple, but only by 1%. That move is more likely a portfolio management decision rather than any specific concern about Apple’s outlook – as the big ole global conglomerate still holds a gigantic $174 billion of Apple stock. It’s roughly half of Berkshire’s entire US stock portfolio. As for why Apple is getting some brushoff from Berkshire and the Gates Foundation, well, that’s not immediately obvious: the iPhone maker’s share price has lagged the move higher in the other mega-cap tech stocks recently, but the company has said it’ll make an AI-related announcement this year, and that could happen as soon as its annual developers’ conference in June.
In the meantime, Berkshire is pouring its energy into, um, energy, increasing its already ginormous stakes in Occidental and Chevron – to 28% of outstanding shares in the former and 8% in the latter. This sector’s stocks might be getting snubbed by some, but they’re still a firm favorite for the Oracle of Omaha, with their strong and steady cash flow ticking off plenty of boxes on his list of investing criteria.
Other big investors, including London-based FundSmith, and Third Point and Tiger Global, both of New York, downsized their holdings in Microsoft during the quarter, as it rallied to a record high.
Not everyone was selling. London-based TCI Fund Management’s Chris Hohn, who has a reputation for making concentrated investments, reappeared on the shareholder register with a $4 billion position, about 11% of TCI’s US portfolio. Now that does seem a little odd, as filings suggest that he sold the firm’s position in the third quarter. Still, like many, he remains gung-ho now about the world’s biggest stock by market cap.
TCI’s biggest position is General Electric, with a 15% weight, and it hasn’t budged on that in the past quarter. Neither have many of its peers: GE is a high-conviction holding of several top hedge funds, amounting to more than 5% of their equity portfolios. And GE, along with several of its US industrial stock peers – like Eaton and Parker Hannifin – continues to trade well, boosted by a strong recovery in US manufacturing. What’s more, a strong core business and some upcoming changes, like the planned GE Vernova spin-off later this year, make GE an interesting idea.
The biotech sector had more than a few mentions in these required disclosures, which is hardly a shocker, given its popularity among investors. AI advancements are expected to accelerate the development of new drugs and increase biotech companies’ ability to produce big returns. BlueOwl Capital, which has a chunky $165 billion under management appeared on the shareholder register for 26 healthcare companies and completed an acquisition of around $1 billion of assets from Cowen Healthcare Investments, a specialist in mid-development stage biopharma stuff. It’s interesting that BlueOwl, which is best known for offering private credit to businesses, sees biotech as a good spot for stock picking.
Family offices including the Walmart-owning Waltons, and Iconiq, a multi-family office, were also both active in the sector, buying stakes in Madriga Pharm and Neumora Therapeutics. Although investing in biotech companies can pay off financially, it’s not easy to identify the winners, so the iShares Biotechnology ETF (ticker: IBB, expense ratio:0.45%) could be a better bet.
Notably not mentioned here: star mega-cap AI play Nvidia. And that’s because this red-hot stock isn’t that widely held by the biggest of the big. Of the few that do own it, some – including Appaloosa Management and Maverick Capital – reduced their holdings in the last three months of 2023. Still, you wouldn’t be wrong in calling Nvidia a “hedge fund hotel” – market slang for a stock that has loads of these investors already checked in. After all, tons of smaller and medium-sized hedge funds hold positions – and they must be pleased with the rally so far this year.
