Berkshire Hathaway’s cash fortress tops $300 billion as Buffett sells more stock, freezes buybacks

Berkshire Hathaway‘s monstrous money pile topped $300 billion within the third quarter as Warren Buffett continued his stock-selling spree and held again from repurchasing shares.

The Omaha-based conglomerate noticed its money fortress swell to a document $325.2 billion by the top of September, up from $276.9 billion within the second quarter, in line with its earnings report launched Saturday morning.

The mountain of money saved rising because the Oracle of Omaha offered important parts of his greatest fairness holdings, particularly Apple and Financial institution of America. Berkshire dumped a few quarter of its gigantic Apple stake within the third quarter, making the fourth consecutive quarter that it has downsized this wager. In the meantime, since mid-July, Berkshire has reaped greater than $10 billion from offloading its longtime Financial institution of America funding.

Total, the 94-year-old investor continued to be in a promoting temper as Berkshire shed $36.1 billion value of inventory within the third quarter.

No buybacks

Berkshire did not repurchase any firm shares throughout the interval amid the promoting spree. Repurchase exercise had already slowed down earlier within the yr as Berkshire shares outperformed the broader market to hit document highs.

The conglomerate had purchased again simply $345 million value of its personal inventory within the second quarter, considerably decrease than the $2 billion repurchased in every of the prior two quarters. The corporate states that it’s going to purchase again inventory when Chairman Buffett “believes that the repurchase value is beneath Berkshire’s intrinsic worth, conservatively decided.”

Class A shares of Berkshire have gained 25% this yr, outpacing the S&P 500’s 20.1% year-to-date return. The conglomerate crossed a $1 trillion market cap milestone within the third quarter when it hit an all-time excessive.

For the third quarter, Berkshire’s working earnings, which embody earnings from the conglomerate’s fully-owned companies, totaled $10.1 billion, down about 6% from a yr prior attributable to weak insurance coverage underwriting. The determine was a bit lower than analysts estimated, in line with the FactSet consensus.

Buffett’s conservative posture comes because the inventory market has roared increased this yr on expectations for a easy touchdown for the financial system as inflation comes down and the Federal Reserve retains slicing rates of interest. Rates of interest haven’t fairly complied recently, nonetheless, with the 10-year Treasury yield climbing again above 4% final month.

Notable traders resembling Paul Tudor Jones have turn out to be apprehensive in regards to the ballooning fiscal deficit and that neither of the 2 presidential candidates squaring off subsequent week within the election will lower spending to deal with it. Buffett has hinted this yr he was promoting some inventory holdings on the notion that tax charges on capital positive factors must be raised in some unspecified time in the future to plug the rising deficit.