Warren Buffett and Berkshire Hathaway continued reducing their stock holdings in the third quarter, cutting back their stake in Apple and raising cash reserves to a record $325.2 billion.
In its quarterly report released on Saturday, Berkshire revealed it had sold around 100 million Apple shares, about 25% of its holding, during the summer, ending with approximately 300 million shares. This brings total Apple shares sold by Berkshire in 2024 to over 600 million, though Apple remains its largest stock position at $69.9 billion.
Berkshire sold a total of $36.1 billion in stocks, including billions in Bank of America shares, while only purchasing $1.5 billion, marking its eighth consecutive quarter as a net stock seller. For the first time since 2018, Berkshire also conducted no stock buybacks.
“Berkshire is a microcosm of the broader economy,” commented Cathy Seifert, an analyst at CFRA Research. She noted that Berkshire’s increased cash holdings reflect a “risk-off” approach, raising concerns about potential economic impacts.
Despite its conservative strategy, Berkshire’s Class A shares have risen 25% this year, outpacing the S&P 500’s 20% gain. Some investors worry high valuations may indicate overpriced stocks.
Berkshire’s cash has grown from $276.9 billion at the end of June, far exceeding the $30 billion cushion Buffett has pledged to maintain. Jim Shanahan, an Edward Jones analyst, remarked that Berkshire’s expanding cash position “begs questions” about Buffett’s views on stock valuations, economic outlook, or plans for a large acquisition.
Berkshire’s operating profit fell 6% to $10.09 billion, affected by underwriting losses from older insurance policies, hurricane claims, and currency shifts. Profits rose for Geico, BNSF Railroad, and Berkshire Hathaway Energy, though other areas, such as Pilot truck stops and retail businesses, saw revenue declines.
Insurance underwriting profit dropped 69%, partly due to losses from previous policies and the impact of Hurricane Helene. Additionally, Berkshire expects $1.3 billion to $1.5 billion in pre-tax losses from October’s Hurricane Milton.
Buffett, who has led Berkshire since 1965, plans to transfer leadership to Vice Chairman Greg Abel, with the transition expected to occur in the coming years.