"Forever" isn't as long as it used to be (and it was never really forever)

In his 1988 letter to Berkshire shareholders, Warren Buffett wrote, "When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever."

In his 2016 letter, he clarified that often-cited statement. "It is true that we own some stocks that I have no intention of selling for as far as the eye can see (and we’re talking 20/20 vision). But we have made no commitment that Berkshire will hold any of its marketable securities forever."

(In an interview with CNBC, Buffett said even a board member had mistakenly believed that Berkshire's general promise - item #11 in the Owner's Manual - to hold on to companies it's purchased also applies to stocks.)

But even though Berkshire didn't break any promises, it's sale during the first quarter of 24.8 million Chevron shares worth roughly $2.6 billion, a little more than half its holdings, is surprising.

Just three months earlier, Berkshire revealed that it had been secretly building a 48.5 million share stake over the second half of 2020.

And during the May annual meeting - after the first quarter sales - Buffett defended Chevron as "not evil" on climate change.

As Barron's notes, however, Berkshire "probably realized a nice profit" as the stock went from $85 to $105 during the first quarter after Berkshire paid an average of $83 per share between July and December. 

Another large sale during the quarter isn't as surprising.

Berkshire sold 51.7 million shares of Wells Fargo, worth around $2 billion at the end of Q1.

That's 99% of its stake from three months before, leaving only a handful of shares after starting to buy more than 30 years ago.

But it's the continuation of a long series of sales that began in 2017, as Wells' "fake account" scandal started picking up steam. 

At the end of the first quarter that year, Berkshire held 519 million shares.

After the 2018 annual meeting, Buffett told us that "ten years from now, you're very likely to find that it outperformed most of its competitors."

Since then, he's become more of a fan of Bank of America, as evidenced by Berkshire's almost $44 billion stake.

Berkshire also closed out a relatively small stake in Synchrony Financial, worth $834 million at the end of Q1.

Barron's estimates that Berkshire has probably left "$10 billion on the table" through its sales of Wells stock, and the liquidation last year of its stakes in JPMorgan Chase and Goldman Sachs.

And while Berkshire did a lot more selling than buying in the first quarter, it did create a nearly $1 billion new stake in the insurance broker Aon.

BUFFETT AROUND THE INTERNET

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BERKSHIRE STOCK WATCH

BERKSHIRE'S TOP U.S. STOCK HOLDINGS - May 21 2021

Berkshire's top holdings of disclosed publicly-traded U.S. stocks by market value, based on today's closing prices.

Holdings are as of March 31, 2021 as reported in Berkshire Hathaway’s 13F filing on May 17, 2021, except for Apple, Bank of America, and U.S. Bancorp, which also include shares held as of March 31, 2021 as disclosed in New England Asset Management’s 13F filing on May 17, 2021.

In addition to U.S. stocks, shares held as of December 31, 2020 of China's BYD, as listed in Buffett's 2020 letter to shareholders, are included. The price of those shares in U.S. trading is used to approximate the current market value of the position. The value of the stake as a percentage of the company's market value is fixed at what was listed as of December 31, 2020 in the letter.

The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.

QUESTIONS OR COMMENTS

Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don't forward questions or comments to Buffett himself.)

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-- Alex Crippen, Editor, Warren Buffett Watch