Warren Buffett raises Berkshire cash level to record $277 billion after slashing stock holdings

Berkshire Hathaway‘s money pile swelled to a document $276.9 billion final quarter as Warren Buffett bought massive chunks in inventory holdings together with Apple.

The Omaha-based conglomerate’s money hoard jumped considerably increased from the earlier document of $189 billion, set within the first quarter of 2024. The rise got here after the Oracle of Omaha bought almost half of his stake in Tim Prepare dinner-led tech big within the second quarter.

Berkshire has been a vendor of shares for seven quarters straight, however that promoting accelerated within the final interval with Buffett shedding greater than $75 billion in equities within the second quarter. That brings the overall of shares bought within the first half of 2024 to greater than $90 billion. The promoting by Buffett has continued within the third quarter in some areas with Berkshire trimming its second largest stake, Financial institution of America, for 12 consecutive days, submitting this week confirmed.

For the second quarter, Berkshire’s working earnings, which embody earnings from the conglomerate’s fully-owned companies, loved a soar due to the power in auto insurer Geico. Working earnings totaled $11.6 billion within the second quarter, up about 15% from $10 billion a 12 months prior.

Buffett, who turns 94 on the finish of the month, confessed at Berkshire’s annual assembly in Could that he’s prepared to deploy capital, however excessive costs give him pause.

“We would like to spend it, however we can’t spend it until we expect [a business is] doing one thing that has little or no danger and might make us some huge cash,” the funding icon mentioned on the time. “It is not like I’ve obtained a starvation strike or one thing like that occurring. It is simply that … issues aren’t enticing.”

The conglomerate purchased again simply $345 million price of its personal inventory within the second quarter, considerably decrease than the $2 billion repurchased in every of the prior two quarters.

The S&P 500 has surged the final two years to document ranges as traders wager the Federal Reserve would decrease inflation with increased rates of interest, whereas avoiding an financial recession. To date, that has performed out with the S&P 500 up 12% in 2024. Nonetheless, considerations a few slowing financial system have been woke up lately by some weak information, together with Friday’s disappointing July jobs report. The Dow Jones Industrial common misplaced 600 factors on Friday. Buyers have additionally lately grown involved in regards to the valuations within the expertise sector, which has led the bull market due to optimism surrounding synthetic intelligence innovation.

Geico, the corporate Buffett as soon as known as his “favourite baby,” registered almost $1.8 billion in underwriting earnings earlier than taxes within the second quarter, greater than tripling the extent of $514 million from a 12 months in the past.

Revenue from BNSF Railway got here in at $1.6 billion, according to final 12 months’s quantity. Berkshire Hathaway Power utility enterprise noticed earnings fall to $326 million, almost half of the $624 million from the identical quarter a 12 months in the past. BHE continues to face stress for potential wildfire legal responsibility.

Berkshire’s internet earnings, which incorporates short-term funding positive factors or losses, declined to $30.3 billion within the second quarter from $35.9 billion in the identical interval a 12 months in the past. Buffett cautions traders to not take note of quarterly fluctuations in unrealized positive factors on investments, which may be “extraordinarily deceptive.”