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5 Stocks Warren Buffett Just Sold From Berkshire's Portfolio

Warren Buffett has said "our favorite holding period is forever," but this doesn't necessarily mean that Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) will hold any of its stocks forever. In fact, Buffett and his investing team sell stocks regularly, and for a variety of reasons.

In this Fool Live video clip, recorded on Feb. 22, contributor Matt Frankel, CFP, and Industry Focus host Jason Moser talk about five stocks Berkshire decided to get rid of entirely during the fourth quarter of 2020.

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Jason Moser: Then he exited completely, it looks like five positions here. Anything stand out to you there?

Matt Frankel: Well, the ones that didn't surprise me were the banks, like I said, he's been selling pretty much every bank but Bank of America (NYSE: BAC).

Moser: Right.

Frankel: He's calling that the winner. He sold PNC Financial (NYSE: PNC), J.P. Morgan Chase (NYSE: JPM), and M&T Bank (NYSE: MTB) completely, which surprised me a little bit. The big surprise here was that he sold Barrick Gold (NYSE: GOLD), which he just bought. Remember he made the investment in the gold miner about a quarter, I think just the quarter before.

Moser: Yeah. I was going to say, I feel like that that just happened. It sounds like it did.

Frankel: It didn't last long and Buffett's normally not one to make a short-term trade. So that just happened, he sold all 12 million shares that they bought.

Moser: Maybe he's going Bitcoin (CRYPTO: BTC) now.

Frankel: I don't think so. I would bet money that he's not going Bitcoin.

Moser: I'm just kidding. [laughs]

Frankel: But I have been wrong about things before. You never know, especially with his lieutenants, Ted and Todd in charge of a lot of it.

Moser: Yeah. They're more forward-looking.

Frankel: It's not out of the realm of possibilities. Buffett and Munger have both said that they don't like Bitcoin.

Moser: Right.

Frankel: That has nothing to do with what his stock pickers who have complete control over billions of dollars want to do. It's not outside the realm of possibilities.

Moser: Not at all.

Frankel: I'll keep my Bitcoin opinions zipped up for a moment.

Moser: Okay.

Frankel: Just because I don't want to get down that rabbit hole today. The fifth one that he sold was Pfizer (NYSE: PFE), which actually surprised me a little bit. He added to his other three healthcare plays. I mentioned Bristol Myers (NYSE: BMY), AbbVie (NYSE: ABBV), but sold out of Pfizer completely. What do you think about that? Do you think it was a vaccine play or --

Moser: I kind of wonder if maybe that isn't it. Obviously the market being very forward looking, I think a lot of what the market has been looking forward with in regards to Pfizer has probably really come to fruition and been pulled forward. So maybe he is looking at that, thinking I've got other opportunities. Perhaps part of that was that Verizon (NYSE: VZ) idea. A little more of a slow and steady, reliable dividend play there with Verizon. That was obviously a massive investment he made, that it may not seem very exciting. I tell you those operators, utilities or the mobile operators, they have that annuity quality to them. There are things that people need, and so they more or less are going to keep running, and they are able to offer up those dividends. It's not like the sun coming up, but they're pretty reliable, Matt.

Frankel: Buffett likes reliable dividends. Berkshire makes billions in dividend income each year off of that portfolio, and that's money that Berkshire can reinvest.

Jason Moser has no position in any of the stocks mentioned. Matthew Frankel, CFP owns shares of Bank of America and Berkshire Hathaway (B shares). The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares) and Bristol Myers Squibb. The Motley Fool recommends Bitcoin and Verizon Communications and recommends the following options: short January 2023 $200 puts on Berkshire Hathaway (B shares), short March 2021 $225 calls on Berkshire Hathaway (B shares), and long January 2023 $200 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.


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