Berkshire Hathaway (BRK.A -0.84%) (BRK.B -0.94%) simply launched its 13F regulatory submitting for the fourth quarter of 2022, revealing what shares Warren Buffett’s conglomerate purchased and bought within the final three months of the yr. There was much more promoting than shopping for.

Whereas the corporate did enhance its place in some holdings, Berkshire did not add a single new inventory within the interval, hinting that Buffett and Berkshire’s outlook might have soured after happening an enormous purchasing spree initially of 2022. This is what Berkshire was shopping for and promoting to cap off 2022.

A pointy reversal on Taiwan Semiconductor

One in every of Berkshire’s extra shocking strikes was its determination to promote roughly 86% of its new stake in Taiwan Semiconductor Manufacturing (TSM 1.93%). Berkshire had simply initiated a greater than $4 billion stake within the big chipmaker within the third quarter.

Whereas Taiwan Semiconductor beat earnings estimates for the fourth quarter, it missed on income, and the corporate considerably in the reduction of its capital expenditure plans for 2023, citing decrease chip demand. Whereas the corporate expects chip demand to bounce again later this yr, and whereas the semiconductor trade is meant to be a high-growth trade transferring ahead, one thing definitely appears to have drastically modified Buffett and Berkshire’s view on the corporate and the chip trade.

Berkshire additionally slashed its stake in giant regional lender U.S. Bancorp (USB 0.08%) by 91% and minimize its place in giant custodian Financial institution of New York Mellon (BK -0.40%) by 59%. Each are longtime Buffett holdings which were robust performers through the years, however the gross sales are much less shocking given Buffett bought a large quantity of shares in each these shares within the third quarter. Each banks commerce at excessive valuations, and the U.S. banking sector is anticipated to see strain this yr on account of rising deposit prices and the affect of a possible recession.

Berkshire additionally bought 12% of its stake in video gaming firm Activision Blizzard (ATVI 0.25%) and 10% of its present place in healthcare merchandise distribution firm McKesson (MCK -0.30%). Lastly, Berkshire barely trimmed its positions in Chevron (CVX 0.77%), Kroger (KR -2.24%), and Ally Monetary (ALLY -1.81%).

Contemporary investments in 2 new shares

Though Berkshire did not open any new positions within the fourth quarter of 2022, the corporate did enhance its place in two shares it purchased for the primary time final yr. Berkshire elevated its place in development supplies agency Louisiana-Pacific Corp. (LPX -0.76%) by 21%, though the corporate is not at all a big place in Berkshire’s portfolio. Berkshire additionally made a small addition to its stake within the giant media firm Paramount International (PARA 0.63%).

Berkshire’s 13F additionally confirmed greater than 333,800 new shares of client big Apple (AAPL -0.42%), which is the most important place in its $352 billion-plus equities portfolio. However do not get too excited — the variety of new shares was equal to the quantity held by insurance coverage firm Alleghany, which Berkshire bought early final yr.

What do Berkshire’s strikes inform us?

Like most traders, Buffett and Berkshire’s outlook for the financial system appeared to get grimmer towards the top of 2022, as many foresaw some type of recession taking part in out this yr. It’s doable issues have modified, however a recession can also be nonetheless within the playing cards.

I used to be notably confused by Berkshire’s sudden reversal on Taiwan Semiconductor as a result of it simply bought a major stake within the firm a number of months earlier. However general, Berkshire undoubtedly stayed conservative and appeared to stay to corporations it is aware of nicely and expects to have the ability to navigate a harder financial system.