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Buffett adds more Apple, reduces IBM stake by another third

In this Monday, May 4, 2015, file photo, Berkshire Hathaway Chairman and CEO Warren Buffett speaks during an interview with Liz Claman on the Fox Business Network in Omaha.

Nati Harnik/AP

Warren Buffett continued to trim a once-major investment in International Business Machines Corp. while adding to newer holding Apple Inc. in the third quarter.

The investor's Berkshire Hathaway Inc. lowered its IBM stake by about a third to 37 million shares as of Sept. 30, when it was valued at roughly $5.4 billion, according to a regulatory filing on Tuesday.

Buffett plowed more than $10 billion into IBM in 2011, making it one of his company's largest investments. The move shocked many, because the billionaire had long steered clear of technology stocks. He defended the pick for years as Big Blue struggled with declining sales and a sagging share price.

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Earlier this year, he did an about-face, saying his thesis was flawed and began to cut back the holding.

The episode highlighted just how badly Buffett, 87, missed the boat on investing in the technology companies that have come to dominate the ranks of the world's most valuable enterprises. At Omaha, Nebraska-based Berkshire's annual meeting in May, he issued a mea culpa, adding that he "blew it" by failing to invest early in Google.

At the same time, he showed he's learning. One of Berkshire's major new holdings is an investment in Apple. The stake was initiated by one of Buffett's deputy investment managers last year. Buffett has since plowed in and joined hedge funds including Coatue Management in upping their holdings in the iPhone maker in the third quarter. Berkshire's investment climbed by about 4 million shares in the period and was valued at roughly $21 billion.

One of Berkshire's biggest new holdings in the filing was previously disclosed. In August, Buffett converted a preferred stake in Bank of America Corp. into common shares. The investment dates to 2011, when Berkshire injected $5 billion into the lender when its shares were slumping over concerns about payouts tied to the housing meltdown. The stake was worth more than $17 billion at the end of September.

Berkshire also:

Added to Monsanto Co. and Synchrony Financial; Cut a stake in Charter Communications Inc. by about 10 percent; Trimmed its stake in Wells Fargo & Co. after Buffett said earlier this year he wants to keep Berkshire's ownership in the bank below 10 percent; Exited Wabco Holdings Inc. after selling most of the stake in the second quarter.

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