Berkshire Hathaway’s Record Cash Holdings
In the third quarter of 2024, Berkshire Hathaway, the investment firm led by Warren Buffett, reached a remarkable cash level of $325.2 billion. This figure marks a record high for the company, reflecting Buffett’s cautious approach toward acquisitions. Despite the large cash pile, Buffett has been trimming down some of his significant equity holdings instead of making major investments. This strategic decision has contributed to the substantial increase in cash reserves.
Significant Changes in Apple Stake
Recently, Berkshire Hathaway announced a reduction in its stake in Apple Inc., one of its most notable investments. At the end of September, the value of Berkshire’s stake in Apple stood at $69.9 billion, down from $84.2 billion in the previous quarter. This reduction of about 25% highlights Buffett’s ongoing strategy to rebalance his portfolio, even as he acknowledges Apple’s strong business performance compared to other holdings like American Express and Coca-Cola. The decision to sell shares could be influenced by tax considerations, as Buffett indicated he is open to maintaining a larger cash position given the current market conditions.
Stock Sales and Market Performance
During the July-September quarter, Berkshire Hathaway was a net seller of shares, with total sales amounting to $34.6 billion. Buffett has expressed that finding suitable investment opportunities has been challenging due to high market prices. He has emphasized that the company will only invest when there are low-risk opportunities that promise substantial returns. Despite the cautious approach, Berkshire’s stock has seen a significant rise, increasing by 25% this year, which boosted its market value to approximately $974.3 billion. However, the company did face challenges, including a notable decline in underwriting income from its insurance businesses, down to $750 million from $2.4 billion last year.
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Warren Buffett’s Berkshire Hathaway Inc. reported a record cash level of $325.2 billion in Q3 2024, driven by reduced major acquisitions and significant equity holdings. The firm cut its stake in Apple Inc. by 25%, dropping from $84.2 billion to $69.9 billion. Despite selling $34.6 billion in shares, Buffett remains cautious, citing high market prices for acquisitions. Berkshire’s stock rose 25% this year, raising its market value to $974.3 billion, despite a 69% decline in underwriting income.
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