Warren Buffett walks the floor before Berkshire Hathaway's annual shareholders meeting in Omaha, Nebraska, on May 3, 2024.
David A. Grogen | CNBC
Berkshire HathawayThe massive cash pile topped $300 billion in the third quarter as Warren Buffett continued his stock selling spree and refrained from buying back shares.
The Omaha-based group saw its cash holding swell to a record $325.2 billion by the end of September, up from $276.9 billion in the second quarter, according to its earnings report released Saturday morning.
The mountain of cash continued to grow as the Oracle of Omaha sold large portions of his largest stock holdings,… apple and Bank of America. Berkshire shed about a quarter of its massive stake in Apple in the third quarter, making it the fourth straight quarter in which it has pared back the size of that bet. Meanwhile, since mid-July, Berkshire has reaped more than $10 billion offloading its long-standing investment in Bank of America.
Overall, the 94-year-old investor continued in a selling mood as Berkshire lost $36.1 billion worth of stock in the third quarter.
No buybacks
Berkshire did not buy back any company shares during this period amid the selling wave. Buyback activity had already slowed earlier in the year as Berkshire shares outperformed the broader market to reach record levels.
The group repurchased just $345 million worth of its own stock in the second quarter, far less than the $2 billion repurchased in each of the previous two quarters. The company states that it will repurchase shares when Chairman Buffett believes “the repurchase price is less than Berkshire's intrinsic value, which is determined conservatively.”
Berkshire Hathaway
Berkshire's Class A shares are up 25% this year, outpacing the S&P 500's 20.1% year-to-date return. The group crossed the $1 trillion milestone in market capitalization in the third quarter when it reached an all-time high.
For the third quarter, Berkshire's operating profit, which includes profits from the group's wholly-owned companies, totaled $10.1 billion, down about 6% from a year earlier due to weak insurance underwriting. This number was slightly lower than analysts expected, according to the FactSet consensus.
Buffett's conservative stance comes at a time when the stock market has risen this year amid expectations of a soft landing for the economy as inflation declines and the Federal Reserve continues to lower interest rates. However, interest rates haven't quite complied recently, with the 10-year Treasury yield rising again above 4% last month.
Prominent investors, such as Paul Tudor Jones, have become concerned about the ballooning fiscal deficit, and that neither of the two presidential candidates running in next week's election will cut spending to address it. Buffett hinted this year that he was selling some of his stock holdings on the idea that capital gains tax rates would have to be raised at some point to plug the growing deficit.
