Berkshire Hathaway Sells More Apple and Bank of America Shares, Accumulating Cash Reserves

OMAHA, Neb. — Warren Buffett is currently holding over $325 billion in cash after selling billions of dollars worth of Apple and Bank of America shares this year. This cash reserve continues to grow as Berkshire Hathaway profits from its various businesses without making any significant acquisitions.

In the third quarter, Berkshire Hathaway disclosed that it sold around 100 million additional shares of Apple. This follows a substantial reduction from last quarter when Buffett halved his investment in the tech giant. With approximately 300 million shares remaining, valued at $69.9 billion as of September's end, Apple continues to be Berkshire's largest investment, though its value has dropped significantly from $174.3 billion at the end of last year.

Shareholders might be disappointed to find that Berkshire did not buy back any of its own shares during the quarter. Analyst Cathy Seifert from CFRA Research suggested that investors may start questioning why Buffett is accumulating such large cash reserves. She raised the point that Buffett might be more pessimistic about future economic conditions than others.

Buffett mentioned at the annual meeting in May that one reason for selling off some Apple shares is his expectation of rising tax rates in the future. Additionally, analyst Jim Shanahan from Edward Jones speculated that Buffett's sell-off might be influenced by the passing of Vice Chairman Charlie Munger last year. Shanahan noted that Munger was more comfortable with technology investments than Buffett.

In the third quarter, Berkshire reported profits driven by investment gains totaling $26.25 billion, or $18,272 per Class A share. This is a turnaround from the previous year, where they faced investment losses resulting in a $12.77 billion loss, or $8,824 per Class A share.

Buffett consistently advises that investors should focus on Berkshire's operating earnings to evaluate the company's health, as these figures exclude investment fluctuations. In this light, Berkshire's operating earnings decreased slightly by about 6%, reaching $10.09 billion, or $7,023.01 per Class A share, down from last year's $10.8 billion.

The company's overall revenue saw little change, coming in at $92.995 billion, compared to $93.21 billion a year earlier. This figure exceeded the expectations set by three analysts surveyed by FactSet, who predicted $92.231 billion in revenue.

Berkshire Hathaway's extensive portfolio includes a range of businesses, from insurance, such as Geico, to the BNSF railroad and various utilities. They also own several retail and manufacturing companies, including popular brands like Dairy Queen and See's Candy.

During this quarter, one of Berkshire's insurers, Guard, reported additional losses due to a reassessment of its policies.

Berkshire clarified a significant transaction from the quarter, revealing it paid $2.4 billion in cash, issued $600 million in debt, and offered Class B Berkshire shares valued at approximately $1 billion to acquire complete ownership of its utility business from the estate of former board member Walter Scott. This brought the total payout to about $4 billion, which was notably less favorable for the Scott family compared to past transactions.

Greg Abel, who is expected to succeed the 94-year-old Buffett as CEO in the event of his death, played a key role in this acquisition.

Berkshire, Buffett, Cash