Warren Buffett meets with Berkshire Hathaway shareholders ahead of the annual meeting on May 3, 2024 in Omaha, Nebraska.
David A. Grogan
Berkshire HathawayLast quarter, the company’s cash pile surged to a record $276.9 billion as Buffett sold a slew of shares, including apple.
The Omaha-based conglomerate’s cash reserves increased significantly from the previous year. The previous record was $189 billionset in the first season of 2024. Sold nearly half of stake in tech giant led by Tim Cook in season two.
Berkshire has sold off its stock for seven straight quarters, but the pace accelerated in the last period as Buffett dumped more than $75 billion in stocks in the second quarter. This brings the total number of shares sold in the first half of 2024 to more than $90 billion. Buffett’s selling continued in some areas in the third quarter, with Berkshire cutting its second-largest holding, Bank of America, 12 consecutive daysdocuments filed this week show.
In the second quarter, Berkshire’s operating profit (including profits from the group’s wholly-owned businesses) increased significantly due to the strength of auto insurance company Geico. Second-quarter operating profit totaled $11.6 billion, an increase of about 15% from $10 billion in the same period last year.
Buffett, who will turn 94 at the end of the month, admitted at Berkshire Hathaway’s annual meeting in May that he was willing to allocate capital, but high stock prices made him hesitant.
“We’d love to spend money, but we won’t unless we think (a business) is doing something that has very little risk and can make us a lot of money,” the investing icon said at the time. “I don’t. Hunger strikes or something like that just… things are not attractive.”
The S&P 500 has soared to record levels over the past two years as investors bet the Fed would raise interest rates to reduce inflation while avoiding a recession. The S&P 500 is up 12% so far in 2024. The Dow Jones Industrial Average fell 600 points on Friday. Investors have also recently begun to worry about the valuation of the technology sector, which has led a bull market due to optimism about artificial intelligence innovation.
Geico boosts revenue
Second-quarter pretax underwriting profit from Geico, which Buffett once called his “favorite child,” was nearly $1.8 billion, more than tripling from $514 million a year ago.
Profit comes from BNSF Railway Revenue was $1.6 billion, consistent with last year’s figure. Berkshire Hathaway Energy Utilities profit fell to $326 million, almost half of the $624 million in the same period last year. BHE continues to face pressure from possible wildfire liability.
Berkshire Hathaway “A” Shares, Year to Date
Berkshire Hathaway’s second-quarter net profit, including short-term investment gains and losses, fell to $30.3 billion from $35.9 billion in the same period last year. Buffett warned investors not to focus on quarterly fluctuations in unrealized investment returns, which can be “highly misleading.”
