On Saturday, May 4, 2024, Berkshire Hathaway, the conglomerate led by legendary investor Warren Buffett, unveiled its first-quarter 2024 figures. The report shed light on the company’s investment strategy, particularly its stock portfolio, which remains heavily concentrated in a select few holdings.

Unwavering Focus: Berkshire’s Top Five Stocks

Despite the dynamic fluctuations in the stock market, Berkshire Hathaway retained its top five holdings unchanged during the initial three months of 2024. This steadfast approach reflects Buffett’s long-standing commitment to strategic investments, even amidst the onset of a new bull run in the market.

Apple: A Dominant Force in Berkshire’s Portfolio

Apple Inc. continues to reign supreme as Berkshire’s largest holding, reaffirming its pivotal position within the conglomerate’s investment strategy. However, Berkshire did opt to trim its Apple investment by 13% during the first quarter, marking a notable adjustment in its portfolio composition.

At the close of the January-March period, Berkshire retained $135.4 billion worth of Apple shares, which translates to approximately 790 million shares. Despite Apple’s struggles in the market this year, experiencing a decline of over 4%, its significance within Berkshire’s portfolio remains unparalleled.

Navigating Market Dynamics: Berkshire’s Diverse Holdings

While Apple commands the lion’s share of Berkshire’s portfolio, the conglomerate maintains significant stakes in other major companies as well. American Express and Bank of America, with positions valued at $34.5 billion and $39.2 billion respectively, underscore Berkshire’s diverse investment approach.

Buffett remarked, “I struggle to find a company akin to American Express, boasting such a robust position and an immensely potent credit card. Its standing has markedly fortified over the past two decades, owing to various factors.”

Furthermore, Berkshire’s longstanding commitment to Coca-Cola, reflected in its $24.5 billion stock holding, highlights Buffett’s enduring faith in the company’s resilience and market presence. Additionally, the conglomerate’s investment in Chevron, valued at $19.4 billion, further diversifies its portfolio across different sectors.

The Significance of Concentrated Holdings

Collectively, these five positions constitute approximately 75% of Berkshire Hathaway’s stock portfolio, underscoring the significance of concentrated holdings within Buffett’s investment strategy. While diversification is often touted as a prudent approach to risk management, Buffett’s emphasis on a select few high-conviction investments speaks volumes about his confidence in their long-term growth potential.

Apple (AAPL) Technical Analysis

Moving Averages: The chart shows the 50-day moving average (MA) in red and the 200-day MA in blue. Currently, AAPL’s price is below the 200-day MA but has recently crossed above the 50-day MA, suggesting a potential short-term upward momentum, although the longer-term trend remains bearish.

Volume: There has been a significant increase in trading volume accompanying the recent price rise, indicating strong buying interest that could support the continuation of the current uptrend.

Relative Strength IndexIn the world of technical analysis, the Relative Strength Index (RSI) stands as a cornerstone tool for traders seeking insights into market momentum. Developed by J. Welles Wilder ... More (RSI): The RSI is around 66.84, which is close to the overbought threshold of 70. This suggests that the stock might be getting overvalued in the short term, which could lead to a potential pullback or consolidation.

On Balance VolumeThe On Balance Volume indicator (OBV) is a technical analysis tool used to measure the flow of money into and out of a security over a specified period of time. It is a cumulative ... More (OBV): The OBV shows a steady increase, which aligns with the increase in price, confirming the strength behind the current price movement.

Stochastic RSIIn the realm of technical analysis, the Stochastic RSI (StochRSI) emerges as a powerful tool for traders seeking to navigate market dynamics with precision. Developed by Tushar S. ... More: This oscillator is at its maximum value of 1.00, indicating that the stock is in the overbought zone. This condition might lead to a short-term reversal or sideways movement as traders might take profits.

Average Directional IndexThe Average Directional Index (ADX) stands as a cornerstone indicator in the toolkit of technical traders, offering insights into the strength of market trends. Developed by Welles... More (ADX): The ADX is relatively low at 15.09, suggesting that the current trend is weak. This might indicate that the recent upward price movement lacks the strength of a strong trend, and caution should be exercised.

Chaikin OscillatorNamed after its creator Marc Chaikin, the Chaikin Oscillator stands as a formidable tool in the arsenal of technical analysts. This oscillator is designed to measure the accumulati... More: This indicator is currently negative at -68,596, indicating that there might be a discrepancy between the volume and price movement, suggesting caution as this could be indicative of distribution.

Overall, while AAPL shows some signs of short-term bullish behavior, the presence of several overbought indicators and a weak trend strength signal potential risks. Investors should monitor these indicators closely for any signs of a trend reversal or continuation. As always, consider aligning these technical insights with broader market conditions and news specifically related to Apple Inc.

Bank of America (BAC) Technical Analysis

Moving Averages: The stock price is currently above both the 50-day (red line) and 200-day (blue line) moving averages, which is a bullish signal. The 50-day moving average is also above the 200-day moving average, further confirming bullish momentum in the medium to long term.

Volume: Trading volume has been fluctuating, with some spikes that correlate with significant price movements. The recent volume levels have been average, suggesting a steady interest in the stock without any major buying or selling pressure.

Relative Strength Index (RSI): The RSI stands at 53.51, which is near the middle of the range. This indicates that the stock is neither overbought nor oversold, giving it room to move in either direction without immediate pressure from RSI extremes.

On Balance Volume (OBV): The OBV is trending upward, which supports the price trend. This suggests that buying volume is outpacing selling volume, contributing to the upward price movement.

Stochastic RSI: The Stochastic RSI is at 0.607, which indicates momentum is neither in the overbought nor oversold territory. This points to a potential for continued upward movement but also suggests watching for any turn in momentum that could indicate a reversal.

Average Directional Index (ADX): With an ADX of 16.72, the strength of the trend is weak. This low reading suggests that the current bullish trend might not be strong, and the market could be in a more consolidative or indecisive phase.

Chaikin Oscillator: The Chaikin Oscillator is at -22,466, indicating that there might be a slight bearish divergence as it is below zero. This could suggest that despite the upward trend in price, there might be decreasing momentum or buying pressure.

Overall, Bank of America’s stock shows bullish indicators through its position above both key moving averages and the upward OBV. However, the weak trend strength (low ADX) and a slightly bearish Chaikin Oscillator highlight the need for caution. Traders should watch for any changes in these indicators that might suggest a strengthening trend or a potential reversal. As always, it’s essential to consider this analysis in the context of broader market conditions and updates specific to Bank of America.

American Express (AXP) Technical Analysis

Moving Averages: American Express is trading above both its 50-day (red line) and 200-day (blue line) moving averages, which is typically a bullish indicator. The 50-day moving average remains above the 200-day moving average, suggesting that the medium to long-term trend is bullish.

Volume: The trading volume appears to be relatively stable with some spikes, particularly on days with significant price changes. A recent increase in volume could indicate renewed interest and potential support for the current price level.

Relative Strength Index (RSI): The RSI is at 54.20, which is in the neutral range. This indicates that the stock is neither overbought nor oversold at the moment, offering potential room for the price to move in either direction without immediate pressure from RSI extremes.

On Balance Volume (OBV): The OBV has been trending upwards, which generally suggests that buying pressure has been consistent and could be supporting the upward trend in price.

Stochastic RSI: Currently at 0.355, the Stochastic RSI indicates that the stock is neither overbought nor oversold. It’s closer to the oversold region, suggesting that there might be a potential for an upward movement if a bullish catalystA stock catalyst is an engine that will drive your stock either up or down. A catalyst could be news of a new contract, SEC filings, earnings and revenue beats, merger and acquisit... More occurs.

Average Directional Index (ADX): The ADX is at 24.88, which indicates a moderate trend strength. While not extremely strong, there is enough trend strength to suggest that the existing upward movement has some support but might require monitoring for sustainability.

Chaikin Oscillator: The Chaikin Oscillator is slightly negative at -510,685, which might suggest some caution as this could indicate potential selling pressure or distribution that isn’t reflected in the price yet.

Overall, American Express displays a generally bullish trend with the stock trading above important moving averages and supported by a positive OBV. However, the mild caution suggested by the Chaikin Oscillator and the moderate ADX value indicate that investors should keep an eye on forthcoming trading sessions for better clarity on whether the bullish momentum will continue. As always, it’s crucial to align these technical insights with broader market conditions and any company-specific news.

Coca-Cola (KO) Technical Analysis

Moving Averages: Coca-Cola’s stock is trading above both the 50-day moving average (red line) and the 200-day moving average (blue line), suggesting a bullish trend. The 50-day MA is also positioned above the 200-day MA, reinforcing the bullish sentiment.

Volume: The volume shows some fluctuation, with a notable spike in recent sessions. This increase in volume, particularly on days with price gains, could indicate strong buying interest.

Relative Strength Index (RSI): The RSI is at 67.97, which is close to the overbought territory of 70. This suggests that the stock might be nearing a potential pullback or at least a temporary slowdown in upward momentum as buyers may start taking profits.

On Balance Volume (OBV): The OBV line has been consistently rising, aligning with the price increase, which confirms the strength and continuity of the current trend.

Stochastic RSI: This indicator is at 0.981, indicating that the stock is in the overbought territory. This level suggests that a price correction could be imminent, or the stock may consolidate before making further moves.

Average Directional Index (ADX): The ADX is at 30.94, indicating a strong trend. This high value typically signifies that the current trend is strong and likely to continue.

Chaikin Oscillator: The oscillator reading is positive at 9,224,498, which suggests that there is considerable buying pressure, supporting further gains in the stock’s price.

Overall, the technical indicators for Coca-Cola are mostly positive, reflecting a strong bullish trend with good buying pressure. However, the proximity of the RSI and Stochastic RSI to overbought levels warrants caution, as these conditions often precede a pullback or consolidation phase. Investors should keep an eye on these indicators for any signs of reversal and adjust their strategies accordingly. Remember, while technical analysis can provide insights, it’s essential to consider it within the broader market context and alongside fundamental analysis.

Chevron (CVX) Technical Analysis

Moving Averages: Chevron’s price briefly crossed below the 50-day moving average (red line), signaling a potential short-term bearish movement. However, it remains above the 200-day moving average (blue line), indicating that the long-term trend is still bullish.

Volume: The trading volume has shown some increases on days when the price dropped, which might suggest selling pressure.

Relative Strength Index (RSI): The RSI is at 50.24, which is in the neutral range. This indicates that the stock is neither overbought nor oversold, providing no clear directional bias based on this indicator alone.

On Balance Volume (OBV): The OBV has been relatively stable, with slight fluctuations. This suggests that there is not a significant volume backing the recent price movements, which could imply a lack of strong buyer or seller commitment.

Stochastic RSI: Currently at 0.160, the Stochastic RSI indicates that the stock is in the oversold territory. This could mean that the stock might see a rebound soon if buyers step back in, considering the stock’s overall bullish long-term trend.

Average Directional Index (ADX): With an ADX value of 26.34, this indicates a moderate trend strength. The current trend is becoming less dominant, which could suggest a potential for trend reversal or consolidation.

Chaikin Oscillator: The Chaikin Oscillator is positive at 4,620,388, suggesting that there is some buying pressure, which might support a potential rebound or stabilization of prices.

The recent crossover below the 50-day moving average along with an oversold Stochastic RSI and a moderate ADX value suggests Chevron might be experiencing a temporary pullback within a longer-term bullish trend. Investors should watch for potential reversal signals, especially if the stock rebounds from the oversold conditions.

Unraveling Buffett’s Investment Philosophy

Berkshire Hathaway’s first-quarter 2024 report offers a compelling glimpse into Warren Buffett’s investment philosophy and approach. Despite the ever-evolving dynamics of the stock market, Buffett remains steadfast in his commitment to a select group of high-quality companies, leveraging their enduring strengths to drive sustained value for Berkshire’s shareholders.

As investors dissect Berkshire’s latest moves and holdings, they gain valuable insights into the mind of one of the most successful investors of our time. Buffett’s unwavering focus on fundamental principles, coupled with his astute judgment and patience, continues to serve as a beacon of wisdom in an increasingly volatile market landscape.

FAQs: Berkshire Hathaway First Quarter 2024

What are Berkshire Hathaway’s top five holdings as of the first quarter of 2024?

Berkshire Hathaway’s top five holdings are heavily concentrated and include Apple, American Express, Bank of America, Coca-Cola, and Chevron.

Why did Berkshire Hathaway reduce its investment in Apple during the first quarter of 2024?

Berkshire Hathaway trimmed its Apple investment by 13%, although Apple remains the largest holding, reflecting a strategic adjustment in its portfolio composition.

How does Warren Buffett’s investment philosophy influence Berkshire Hathaway’s strategy?

Warren Buffett’s investment philosophy is characterized by a focus on a select group of high-quality companies, leveraging their enduring strengths to drive sustained value, despite market dynamics.

What is the significance of concentrated holdings in Buffett’s strategy?

Concentrated holdings are significant in Buffett’s strategy as they represent a commitment to high-conviction investments, which he believes have long-term growth potential.

How does Berkshire Hathaway manage its diverse portfolio amidst market fluctuations?

Despite market fluctuations, Berkshire Hathaway maintains significant stakes in various major companies, diversifying across different sectors while focusing on core, high-value stocks.