Home Finance Berkshire Hathaway’s cash fortune surpasses $300 billion as Buffett sells more shares and freezes buybacks

Berkshire Hathaway’s cash fortune surpasses $300 billion as Buffett sells more shares and freezes buybacks

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Berkshire Hathaway's cash fortune surpasses $300 billion as Buffett sells more shares and freezes buybacks

Warren Buffett speaks prior to Berkshire Hathaway’s annual shareholder meeting in Omaha, Nebraska, on May 3, 2024.

David A. Grogen | CNBC

Berkshire Hathaway‘s monstrous cash pile reached $300 billion in the third quarter, while Warren Buffett continued his stock selling and refrained from buying back shares.

The Omaha-based conglomerate saw its cash fortune grow to a record $325.2 billion at the end of September, up from $276.9 billion in the second quarter, according to its earnings report released Saturday morning.

The pile of money continued to grow as the Oracle of Omaha sold off significant portions of his largest stock holdings Apple And Bank of America. Berkshire dumped about a quarter of its massive stake in Apple in the third quarter, marking the fourth straight quarter it has scaled back that stake. Meanwhile, Berkshire has raised more than $10 billion since mid-July from offloading its years-long investments in Bank of America.

Overall, the 94-year-old investor remained in a selling mood as Berkshire lost $36.1 billion worth of shares in the third quarter.

No buybacks

Berkshire did not buy back any shares of the company during the sell-off during the period. Buyback activity had already slowed earlier this year as Berkshire shares outperformed the broader market and hit record highs.

The conglomerate had repurchased just $345 million of its own stock in the second quarter, significantly less than the $2 billion repurchased in each of the previous two quarters. The company said it will repurchase shares when Chairman Buffett “believes the repurchase price is below Berkshire’s conservatively determined intrinsic value.”

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Berkshire Hathaway

Class A shares of Berkshire are up 25% this year, better than the S&P 500’s 20.1% return since the start of the year. The conglomerate crossed a $1 trillion market cap milestone in the third quarter, when it hit an all-time high.

For the third quarter, Berkshire’s operating income, which includes profits from the conglomerate’s entire operations, totaled $10.1 billion, down about 6% from a year earlier due to weak insurance coverage. According to the FactSet consensus, this figure was slightly less than analysts expected.

Buffett’s conservative stance comes as the stock market has risen higher this year on expectations for a smooth landing for the economy as inflation falls and the Federal Reserve continues to cut interest rates. However, interest rates have not fully adjusted recently, with 10-year government bond yields rising above 4% again last month.

Notable investors such as Paul Tudor Jones have grown concerned about the rising budget deficit and that neither of the two presidential candidates running in next week’s elections will cut spending to address the deficit. Buffett has hinted this year that he would sell some stock holdings because he believed tax rates on capital gains would have to be raised at some point to close the growing deficit.

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