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When 2023 second-quarter earnings revealed that Warren Buffett’s Berkshire Hathaway sold $8 billion worth of stock, financial experts and investors immediately hailed the move as a safeguard against an upcoming recession and a potential market crash tipping point. declared as
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Steve Hanke, professor of applied economics at Johns Hopkins University in Baltimore, told Business Insider Berkshire’s recent actions are “consistent with fears of a recession and the fact that stocks are currently expensive.”
“It’s also consistent with his long track record of hoarding cash in anticipation of storm clouds and his ability to bargain after a storm,” Hanke said.
Kevin O’Leary Offers His Opinion on Buffett’s Stock Sale
However, not all pundits see Buffett’s moves as a sign of future market turbulence. Canadian businessman and “Shark Tank” star Kevin O’Leary anticipates trouble for the US economy, but thinks it will come through rising interest rates rather than stock sales by “The Oracle of Omaha.”
O’Leary said, “Warren Buffett selling $8 billion worth of stock is an integer error in his portfolio.” posted on xThis platform was earlier known as Twitter. “He’s just trying to stay diversified, which is why the market doesn’t care that much.”
Speaking to Fox News, O’Leary elaborated, saying Buffett’s $8 billion selloff is “almost meaningless.” “My bet is that Sales is actually trimming a portfolio with one of their new managers.”
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However, with the Federal Reserve not ruling out further interest rate hikes this year, O’Leary is predicting “chaos” for the US economy.
“What I anticipate is going to happen here is, while we still have full employment which is remarkable, and you don’t put any capital into the small business sector, which is 60% of the jobs in America, you’re going to start September, October, November will see some real chaos,” O’Leary told Fox’s Larry Kudlow.
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He said, “A trillion for the big boys, nothing for the little guys.” “And the little guys, they run America, so it has to be rebalanced somewhere.”
In addition to Berkshire selling a net $8 billion of stock last quarter, the group only bought back $1.4 billion, up from $4 billion in the first quarter. According to Insider, Berkshire grew its cash pile by 13% to a record close to $147 billion, the second largest ever.
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This article was originally published on GOBankingRates.com: Kevin O’Leary says Warren Buffett’s $8 billion worth of stock selling is almost meaningless and won’t cause the stock market to crash.