Buffett Too Big to Tiptoe Toward the Fire Escape

by Rick Ackerman

Monday’s commentary typically goes out before markets lurch back to life Sunday evening, but it appeared likely that the weakness we saw on Friday will continue and perhaps gain momentum. Rick’s Picks unfurled the yellow flag just in time Thursday night after the S&Ps and AAPL both failed to reach respective Hidden Pivot rally targets by crucial inches. Concerning the latter, Warren Buffett turns out to have dumped about 25% of Berkshire Hathaway’s $72 billion stake during the first quarter. [Late-breaking note: I am now informed by my source that Berkshire Hathaway did not in fact sell a significant portion of its Apple holdings, at least not as of March 31. My hunch, however, is that Berkshire eventually will be shown to have sold quite a few shares of the stock as it rallied into the April window. If not, he certainly should have. RA] Well before this news, we had characterized Apple’s powerful bear rally as smart money unloading as much stock as possible into a short-covering panic. Buffett being Buffett, he and his ilk have been very careful about not dumping so much stock into the buying frenzy that it might risk overwhelming it. On the evidence, this is exactly what has been happening, and it seems all but certain that Buffett and the Masters of the Universe will continue to distribute stock as deftly as waning demand will allow.

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