4 Stocks Guy Spier Was Selling in Q4

Guy Spier of Aquamarine Capital is an incredibly intelligent value investor who’s heavily influenced by the great Warren Buffett. Just have a look at the Aquamarine portfolio, and you’ll notice many Buffett stocks as well as names that the Oracle of Omaha probably would have liked. With Buffett now retired, perhaps it’s Guy Spier and other Buffett followers who might be worth watching in any given quarter.

In any case, Guy Spier’s fourth-quarter moves are out, and there were remarkable sales right across the board. That might come off as a bit worrisome, especially given how rough January has been so far, with the S&P now down close to 1% on the year after a treacherous Tuesday over Greenland worries.

With valuations at a high point, it should come as no surprise to see a Buffett-style value investor take quite a few chips off the table in the fourth quarter. For Q4, it was all sells and no buys for Aquamarine Capital. Whether it’s worth Spier and company following amid the recent January volatility spike, though, remains the big question.

Let’s dig deeper and get into the four big share sales from Q4:

Berkshire Hathaway

Berkshire Hathaway (NYSE:BRK-B), is, by far, the largest holding of Spier’s fund. He’s a big Buffett fan who actually went to lunch with the man, so it’s no surprise to see Berkshire Hathaway comprise the core of Aquamarine. Reportedly, Spier reduced its Berkshire stake by just over 30%, which might be ringing alarm bells in the ears of some. Of course, the share sales would have come ahead of Buffett’s eventual retirement.

And while Berkshire still remains the largest holding, comprising nearly a third of the portfolio, I do think that such a substantial reduction might have more to do with market-wide valuations than anything against Berkshire. Though Berkshire Hathaway stock certainly isn’t the priciest stock in the market, it certainly is a name that’s had a rough go in recent quarters.

Perhaps there will be a better entry point on the horizon should the market tumble into a correction at some point. Until Berkshire really gets aggressive with share repurchases, perhaps the stock isn’t cheap enough to consider at this juncture, especially as new CEO Greg Abel looks to make his mark.

American Express

American Express (NYSE:AXP | AXP Price Prediction) is Berkshire’s second-largest public portfolio holding, just as it is for Aquamarine. With Spier reportedly trimming his stake in the credit card firm by around 69%, there’s a lot to be concerned about, especially now that Trump is floating around credit card cap plans. Of course, American Express stock has been on a run, and it’s a prime candidate for profit-taking.

As to whether the massive reduction is the answer to the now heftier 23.6 times trailing price-to-earnings (P/E) multiple remains the big question. I think the premium price is worth paying, but other investors might not think the same, especially as the health of the consumer comes into question.

Personally, I view businesses that are more exposed to the middle-income consumer as a good place to be. As such, while American Express is one of Spier’s bigger sells last quarter, I see the name as still buyable despite choppiness and the expanded multiple.

Mastercard

Sticking with the theme of credit cards, Spier trimmed his stake in Mastercard (NYSE:MA) by around 39% in the fourth quarter. Undoubtedly, it’s a profit-taking move that seems to mirror the cut in the American Express stake.

While less heated in the past year, I do think Mastercard is not a cheap stock at 34 times trailing price-to-earnings (P/E), even if there are AI catalysts in play for the new year.

Ferrari

Finally, Spier cut his Ferrari (NYSE:RACE) stake in half, a move that looks well-timed, given shares have accelerated to the downside in recent weeks, off by close to 11% in a month.

With downgrades and other uncertainties to worry about, perhaps the luxury automaker isn’t the best place to be in an environment that’s poised to cool. With a soft growth outlook and less excitement ahead, perhaps the name deserves to be trimmed.