Berkshire Hathaway’s cash reserves have reached a record high of $325.2 billion in the third quarter. The conglomerate’s chairman, Warren Buffett, has continued to sell stocks and refrain from major acquisitions. Berkshire trimmed its stake in Apple for the fourth consecutive quarter.
Warren Buffett is sitting on over $300 billion in cash.
Wild. pic.twitter.com/Q58CLTB9HT
— Anthony Pompliano ? (@APompliano) November 2, 2024
Berkshire Hathaway will release its Q3 10-Q tomorrow morning. As with last quarter, I fully expect to see a further MATERIAL reduction in its Apple investment. At 36x 2024 earnings, little revenue growth over the last two years, perhaps 6-7% prospective long-term growth on an… pic.twitter.com/xfLVcxL5Vs
— Christopher Bloomstran (@ChrisBloomstran) November 1, 2024
The company’s Apple holdings were valued at $69.9 billion at the end of the quarter, down from $84.2 billion in the second quarter. This indicates that Berkshire cut its Apple stake by about 25%. Buffett also sold more than $10 billion worth of Berkshire’s longstanding investment in Bank of America since mid-July.
In total, the company offloaded $36.1 billion worth of stock in the third quarter. Despite the stock sales, Berkshire did not repurchase any of its own shares.
Berkshire boosts cash, trims Apple
Berkshire Hathaway Inc.’s cash pile reached $325.2 billion in the third quarter, a record for the conglomerate, as Warren Buffett continued to refrain from major acquisitions while trimming some of his most significant equity stakes.https://t.co/Wm3eaRnoMU
— menaka doshi (@menakadoshi) November 2, 2024
Despite the decline in Berkshire Hathaway’s operating earnings due to insurance losses, there were some positive developments. Warren Buffett sold more of its stake in Apple, sending its cash hoard above $320 billion. $BRKA $BRKB $AAPLhttps://t.co/K3imigAcmi
— Bill Stone (@ewstone) November 2, 2024
Share buybacks had already slowed down earlier in the year as Berkshire’s stock outperformed the broader market and reached record highs. Berkshire’s Class A shares have gained 25% this year, surpassing the S&P 500’s 20.1% year-to-date return. The company’s market value crossed the $1 trillion milestone in the third quarter.
Operating earnings, which include profits from Berkshire’s fully-owned businesses, totaled $10.1 billion in the third quarter. This represents a 6% decrease from the previous year, primarily due to weak insurance underwriting results. Buffett’s conservative approach comes amid a strong stock market rally driven by expectations of declining inflation and continued interest rate cuts by the Federal Reserve.
However, some investors, such as Paul Tudor Jones, have expressed concerns about the growing fiscal deficit and doubt that either presidential candidate in the upcoming election will address it through spending cuts. Buffett has suggested that he is selling some stock holdings based on the possibility of higher capital gains tax rates in the future to address the deficit.
