Buffett Sells $6B in Stocks in His Second-to-Last CEO Quarter

In the latest financial report from Berkshire Hathaway, CEO Warren Buffett detailed significant developments during his penultimate quarter at the helm. The company’s operating profits surged, and its cash reserves reached an unprecedented level, although Buffett grappled with finding attractive investments.

Financial Highlights

Berkshire Hathaway’s third-quarter earnings report revealed impressive statistics:

• Operating income increased by 34% year-on-year, totaling $13.5 billion.
• Insurance underwriting profits nearly tripled, reaching $2.4 billion.
• Profits rose from the BNSF Railway, as well as from the manufacturing, service, and retail sectors.
• However, the energy and insurance investment divisions experienced a drop in operating earnings.

The company reported a cash pile exceeding $350 billion, marking a new high. In this quarter, Buffett and his team invested $6.4 billion in stocks but sold $12.5 billion, establishing a pattern of net selling for 12 consecutive quarters.

Buffett’s Investment Strategy

Despite the increased cash reserves, Buffett did not purchase any Berkshire shares for the fifth quarter in a row. This absence of buybacks suggests that even Buffett did not view his company’s stock as a bargain. The lack of large-scale stock acquisitions contributed to the overall cash reserves swelling to $358 billion, or $382 billion when excluding treasury purchase payables.

Transition in Leadership

Warren Buffett, at 95 years old, made headlines earlier this year by announcing his plans to step down as CEO after 55 years. Greg Abel, who leads Berkshire’s non-insurance operations, is poised to take over the role. Buffett will continue to serve as chairman following this transition.

Recent Acquisitions

While Buffett has struggled to find new investment opportunities, a significant deal was made in early October. Berkshire agreed to acquire OxyChem, a chemicals business, from Occidental Petroleum for nearly $10 billion. This acquisition adds to Berkshire’s portfolio, emphasizing its active presence in the market, despite current challenges in stock purchases.