### Warren Buffett's Berkshire Hathaway Sells Apple Stock in Anticipation of Higher Capital Gains Taxes

Berkshire Hathaway, led by CEO Warren Buffett, has significantly reduced its holdings in Apple, one of its most profitable investments over the past decade. This strategic move comes as the investment giant amasses a record $325.2 billion in cash reserves, anticipating an increase in capital gains taxes.

The company began the gradual sell-off of its Apple shares late last year, accelerating the process in 2023. By the end of the second quarter, Berkshire had cut its stake in half, contributing to a then-record cash reserve of $277 billion. The trend continued through the third quarter, with Berkshire selling an additional quarter of its Apple shares, equating to 100 million shares. This reduced Berkshire's total Apple holdings to 300 million shares, down from 400 million.

Despite selling over two-thirds of its Apple stake within a year, Apple remains Berkshire's top holding at $69.9 billion. At its height, Apple shares constituted $178 billion of Berkshire’s portfolio. Buffett’s methodical reduction of Apple shares aligns with his broader trend of scaling back equity holdings over the past two years. During the third quarter this year, Berkshire acquired only $1.5 billion in stocks, marking its eighth consecutive quarter as a net seller of equities.

Berkshire's cash and short-term treasuries now exceed the market value of its equities, which stood at $271.6 billion at the end of the third quarter, according to the latest earnings report. While this strategy has raised questions, Berkshire's shares have increased by 52% over the past three years, surpassing the S&P 500's 22% gain.

Buffett anticipates that capital gains taxes will rise, possibly to address the federal deficit, which was approximately 122% of GDP in 2023. During Berkshire’s annual shareholder meeting in May, Buffett indicated his expectation of higher taxes citing current fiscal policies. Vice President Kamala Harris has proposed increasing the corporate tax rate from 21% to 28% if elected president. Conversely, former President Donald Trump has announced plans to reduce the corporate tax rate to 15% for U.S.-manufacturing companies.

Buffett assured shareholders that Apple would remain Berkshire Hathaway’s largest investment, but emphasized the importance of maintaining a substantial cash position amid current market conditions. Despite the potential tax increases, Buffett seemed unfazed, expressing that paying significant federal income taxes is appropriate for Berkshire.

This careful orchestration of asset management showcases Buffett's strategic foresight, balancing current equity opportunities with predicted fiscal shifts. His approach underscores a cautious yet optimistic stance towards market volatility and future fiscal policies.