Warren Buffett Is Selling These Stocks

Okay, let me pay my respects right at the start. Warren Buffett is a personal hero of mine. I've fashioned many elements of my own life after Buffett's, including investing. This has radically changed and improved every aspect of my existence. However, Buffett is a human being. And like any other human being, he can, and sometimes does, make mistakes. Indeed, he might have recently done just that. Not only that, it's a mistake he might be actually repeating.

Today, I want to tell you why Warren Buffett might be making a huge mistake yet again by selling a certain group of stocks.

Buffett controls a $300 billion common stock portfolio within his conglomerate, Berkshire Hathaway. While he does have two investing lieutenants to help him manage money - Todd Combs and Ted Weschler - Buffett is still the big boss who oversees everything. While we can never say with certainty who is doing what within the portfolio, the buck ultimately stops with Buffett.

Moreover, no matter who's doing the buying and selling is still impacting Buffett and all other Berkshire Hathaway shareholders. So getting caught up in who's doing what is missing the point. And the point here is, Buffett & Co. have recently been selling a particular group of stocks, which I think is a huge mistake. I'm talking about Big Pharma. That's right. Berkshire Hathaway significantly reduced their exposure to pharmaceutical businesses throughout Q3 2021. They're moving out of Big Pharma in a big way. We know this after seeing their most recently filed 13F.

So which pharma stocks did Berkshire Hathaway sell last quarter?

They sold slightly more than 6.1 million shares of AbbVie Inc.(ABBV), almost 4.3 million shares of Bristol-Myers Squibb Co.(BMY), nearly 9.2 million shares of Merck & Co., Inc.(MRK), and over 1.5 million shares of Organon & Co.(OGN). The Merck and Organon positions were completely sold out of. The positions in AbbVie and Bristol-Myers Squibb were substantially reduced. By Berkshire Hathaway standards, these sales are... odd. I say that because Buffett is almost legendary with his holding period. He's famously patient, willing to hold on to investments for decades. Well, Berkshire Hathaway initiated their positions in major pharma companies in Q3 2020. They then started to cut back on their exposure almost immediately. They spent Q1 and Q2 of this year selling AbbVie, Bristol-Myers Squibb, and Merck. They've now completely sold out of Merck, as well its spin-off Organon. I've called this a mistake before. And now I'm saying that they're repeating the mistake.

Video Length: 00:09:24

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