Berkshire Hathaway’s Record $276.9 Billion Cash Pile Amid Major Stock Sales and Market Concerns

Berkshire Hathaway’s cash reserves hit a record $276.9 billion last quarter, driven by significant stock sales, including a large portion of its holdings in Apple. The Omaha-based conglomerate’s cash hoard jumped from a previous high of $189 billion set in Q1 2024, after Warren Buffett sold nearly half of his stake in the tech giant during the second quarter.

This marks the seventh consecutive quarter of Berkshire being a net seller of stocks, with an accelerated pace of sales in the latest period. Buffett shed more than $75 billion in equities in Q2 alone, pushing the total stock sales in the first half of 2024 to over $90 billion. The trend continued into Q3, with Berkshire reducing its Bank of America holdings for 12 straight days.

🚨 Warren Buffett’s Berkshire Hathaway cuts stake in Apple by nearly 50%, raises Berkshire cash level to record $277 billion pic.twitter.com/OF0K6XaC8g

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Operating earnings for Berkshire saw a significant rise, reaching $11.6 billion in Q2, up from $10 billion the previous year. This increase was largely due to the strong performance of its auto insurer, Geico, which reported nearly $1.8 billion in pre-tax underwriting earnings, more than tripling from a year ago.

Buffett, who will turn 94 at the end of the month, remains cautious about spending the company’s substantial cash pile. He indicated at Berkshire’s annual meeting in May that while he is willing to invest, current high prices make him hesitant. “We’d love to spend it, but we won’t spend it unless we think a business is doing something that has very little risk and can make us a lot of money,” Buffett said.

BREAKING: Warren Buffett’s Berkshire Hathaway now holds a record $277 billion in cash after selling approximately 50% of its Apple $AAPL stake. What should he buy next?

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The company bought back only $345 million worth of its own stock in Q2, a sharp drop from the $2 billion repurchased in each of the prior two quarters.

The broader market has seen strong gains over the past two years, with the S&P 500 up 12% in 2024, as investors bet on the Federal Reserve’s ability to manage inflation without triggering a recession. However, recent weak economic data, including a disappointing July jobs report, has raised concerns about a slowing economy. This led to significant market declines, with the Dow Jones Industrial Average dropping 600 points on Friday.

Despite these market jitters, Berkshire’s Geico unit delivered impressive results, with pre-tax underwriting earnings soaring to nearly $1.8 billion in Q2. Meanwhile, profit from BNSF Railway remained steady at $1.6 billion, but Berkshire Hathaway Energy’s earnings fell to $326 million, down from $624 million a year ago, partly due to ongoing pressures from potential wildfire liabilities.

🚨BREAKING🚨

WARREN BUFFETT SELLS 50% OF APPLE HOLDING $BRK.B $AAPL

Report Suggests Berkshire Hathaway holds a record $277 BILLION in cash! pic.twitter.com/669v25ktyt

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Berkshire’s net earnings, including short-term investment gains or losses, dropped to $30.3 billion in Q2 from $35.9 billion a year earlier. Buffett cautioned investors against paying too much attention to quarterly fluctuations in unrealized gains on investments, noting they can be “extremely misleading.”

Key Points:

• Berkshire Hathaway’s cash reserves surged to a record $276.9 billion in Q2 2024.
• Warren Buffett sold over $75 billion in equities in Q2, including a significant portion of Apple shares.
• Operating earnings increased to $11.6 billion, driven by strong performance from Geico.
• The company’s stock buybacks fell sharply to $345 million in Q2, down from $2 billion in each of the prior two quarters.
• Market concerns are growing amid weak economic data, impacting broader market sentiment and leading to significant declines.

Fallon Jacobson – Reprinted with permission of Whatfinger News