Warren Buffett’s conglomerate Berkshire Hathaway has broken its own records for cash accumulation, with its cash pile reaching an astonishing $157 billion last quarter. This surpasses its previous record of $149 billion, which was set in late 2021. In fact, Berkshire Hathaway’s cash reserves now exceed the market capitalization of Disney, which is valued at $156 billion.
The significant growth in Berkshire’s cash and Treasury bill assets indicates that Buffett and his team have struggled to find attractive investment opportunities in the stock market and on the acquisition front. This is evident from their third-quarter earnings report, which reveals that they only spent $1.7 billion on stocks last quarter, while selling approximately $7 billion worth. As a result, they were net sellers, with a total of $5.3 billion in sales.
Furthermore, Berkshire Hathaway allocated only $1.1 billion for stock buybacks during the period, which is $300 million less than the second quarter and significantly less than the $4.4 billion spent in the first quarter. The slower pace of buybacks can be attributed to the roughly 13% increase in Berkshire’s stock price over the past six months.
Buffett’s sprawling conglomerate, often seen as a microcosm of the US economy, experienced a surge in operating earnings of 41% year-on-year, amounting to nearly $11 billion last quarter. This was driven by the revival of its insurance business and a $183 million contribution from its acquisition of Pilot Travel Centers.
However, weakness in the BNSF Railway and Berkshire Hathaway Energy divisions tempered the overall positive results. Despite this, Buffett and his team have significantly reduced their spending this year. In 2022, they invested a record $68 billion in stocks, acquired Alleghany for $12 billion, and repurchased nearly $8 billion of their own stock. In contrast, during the first nine months of this year, they sold net stocks worth $24 billion and repurchased only $7 billion.
Interestingly, Buffett and his team have capitalized on higher interest rates, as evidenced by the decrease in their total cash and cash equivalents from $26 billion in January to $126 billion in September. This shift indicates a move towards short-term Treasury investments.
Overall, Berkshire Hathaway’s impressive cash accumulation reflects the current challenges in finding attractive investment opportunities. With their vast scale and diverse range of subsidiaries, Buffett and his conglomerate continue to closely mirror the performance and trends of the US economy.
I have over 10 years of experience in the cryptocurrency industry and I have been on the list of the top authors on LinkedIn for the past 5 years. I have a wealth of knowledge to share with my readers, and my goal is to help them navigate the ever-changing world of cryptocurrencies.
