Berkshire cash hits $325 billion amid stock selloff

by / ⠀News / November 5, 2024
Berkshire cash hits $325 billion amid stock selloff

Warren Buffett’s Berkshire Hathaway saw its cash reserves soar to a record $325.2 billion in the third quarter.

The increase was driven by Buffett’s continued stock-selling spree, including significant reductions in some of Berkshire’s largest holdings like Apple and Bank of America. Berkshire sold about 100 million Apple shares, or 25%, over the summer, ending with approximately 300 million shares.

This brings the total to more than 600 million Apple shares sold in 2024, though it remained Berkshire’s largest stock holding at $69.9 billion. The company also offloaded several billion dollars worth of Bank of America shares. Overall, Buffett shed $36.1 billion in stocks during the quarter, marking the eighth consecutive quarter as a net seller.

Berkshire’s record cash reserves increase

Despite the stock market’s gains this year, Berkshire did not repurchase any of its own shares during the period. Repurchase activity had already slowed earlier in the year as the company’s stock outperformed the broader market, reaching record highs.

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Berkshire’s operating profit, which encompasses profits from its fully-owned businesses, fell 6% to $10.09 billion.

This decline was largely due to higher insurance underwriting liabilities, including losses from Hurricane Helene, and currency losses from a strengthening U.S. dollar. These costs offset improved profitability at Geico, where accident claims and expenses fell, and increased profits at BNSF railroad and Berkshire Hathaway Energy.

Buffett, 94, has hinted that he was selling some stock holdings on the belief that tax rates on capital gains could be raised to help manage the growing fiscal deficit. The investor is expected to eventually transfer leadership of Berkshire to Vice Chairman Greg Abel, 62.

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