Berkshire Hathaway’s massive cash reserve topped $300 billion in the third quarter as Warren Buffett resumed his stock-selling binge and declined to repurchase shares.
The Omaha-based conglomerate’s cash fortress increased from $276.9 billion in the second quarter to $325.2 billion by the end of September.
The wealth mountain kept growing as the Oracle of Omaha sold off significant portions of his biggest stock holdings, which included Apple and Bank of America. For the fourth straight quarter, Berkshire reduced this bet by selling off over 25% of its enormous Apple holdings in the third quarter. Meanwhile, since mid-July, Berkshire has received about $10 billion from the sale of its long-standing Bank of America
Berkshire didn’t try to repurchase any business stock during the selling flurry. Repurchase activity had already stopped earlier in the year as Berkshire shares outperformed the market and hit new highs.
The company repurchased $345 million of its stock in the second quarter, compared to $2 billion in the preceding two quarters. The company stated it would buy back stock when Chairman Buffett “believes that the repurchase price is below Berkshire’s intrinsic value, conservatively determined.”
Buffett’s cautious stance coincides with the stock market’s surge this year on hopes of a smooth economic recovery as inflation moderates considerably and the Fed continues to lower interest rates.
Interest rates have not exactly followed suit, as last month saw the 10-year Treasury yield return to above 4%. Buffett made hints this year that he was selling certain stocks because capital gains taxes would eventually need to be hiked.
