Sold another $6.1 billion in the third quarter, no buybacks for five consecutive quarters, sold a total of $184 billion in stocks over three years! What Buffett leaves Berkshire is: $382 billion in cash.
As 95-year-old Buffett prepares to step down, Berkshire Hathaway's cash reserves are hitting new historic highs—$382 billion.
On Saturday, November 1st, the group released its latest financial report, showing that as of the third quarter, the group's cash reserves reached $381.7 billion, an increase of $37.6 billion over the previous quarter—the equivalent of $420 million in cash added daily, and $17 million every hour.
Behind this record is the company's ongoing sell-off. In the past three years, Berkshire has cumulatively net sold about $184 billion in stocks, with another $6.1 billion in common stock sold just in the third quarter.
“Buffett sees very few opportunities right now,” commented Jim Shanahan, analyst at Edward Jones.
Berkshire's latest financial report seems to be sending a message to the market: in Buffett’s view, the current environment offers far more selling opportunities than buying.
Besides trimming its stock portfolio, Berkshire has remained extremely restrained in buying back its own shares. Since the second quarter of 2024, the company has not conducted any buybacks.
This giant spanning insurance, railways, and utilities is adopting an unprecedentedly cautious posture, accumulating enormous "ammunition" by continuously selling shares and pausing buybacks—leaving vast room for imagination and challenge in the coming "post-Buffett era."
Selling Far Outweighs Buying
Specifically regarding Berkshire Hathaway’s investment activities, in its $283.2 billion stock portfolio, for the 12th consecutive quarter,the number of stocks sold has exceeded those bought.
The biggest sell-offs include Apple, American Express, and Bank of America.
For Berkshire Hathaway enthusiasts, this may be somewhat frustrating. Because earlier this year, Buffett seemed to resume actively seeking acquisitions—first spending $1.6 billion to acquire shares in UnitedHealth Group, then last month buying OxyChem for $9.7 billion.
But the famous billionaire was inactive in the third quarter. Berkshire Hathaway sold $6.1 billion in stocks during that period.
Since Buffett announced at the annual shareholders meeting in May that he would step down as CEO, Berkshire's Class A share price has fallen about 12%, while the S&P 500 Index has risen nearly 20% during the same period.
The ongoing sell-off and paused buybacks "may explain why Berkshire's share price has consistently lagged the broader market, and has now returned to last August's level."
“I think this sends a very powerful message to shareholders. If even they aren’t buying back their own shares, why should you?” said Cathy Seifert, analyst at CFRA Research.
Despite the extremely cautious investment activity, Berkshire's business fundamentals remain strong. The financial report shows operating profit for the third quarter grew 34% year-on-year, reaching $13.5 billion. This was mainly due to its insurance business, with underwriting profit over the past 12 months tripling to $2.4 billion.
Challenges and Opportunities in the “Post-Buffett Era”
Over the past 60 years, Buffett has built Berkshire Hathaway into one of the world's largest investment companies.
In two months, at the end of this year, Buffett will formally step down as CEO, succeeded by Greg Abel, 62, head of non-insurance businesses. Buffett will continue as Chairman. Abel will be taking over a business empire with nearly 200 subsidiaries and $382 billion in cash.
How to effectively deploy this vast sum of money will be Abel’s first major challenge. Last month, a deal led by Abel—using $9.7 billion in cash to acquire Occidental Petroleum’s chemical business—was seen as a rehearsal for capital moves in the “post-Buffett era.”
Some long-term investors remain optimistic. Chris Bloomstran, President and Chief Investment Officer of Semper Augustus Investments and a Berkshire shareholder, said: “Greg is perfectly suited to take the reins from Warren.”
But other investors are more impatient. Tom Russo, partner at Gardner Russo & Quinn, noted: “Impatient investors are eager for Berkshire to deploy its cash, and have begun looking elsewhere.”
No matter what, Abel and his team will be holding vast sums, searching for the next “elephant” in a market full of uncertainty.
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