June 21, 2024

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Warren Buffett’s Berkshire Hathaway sells stocks as cash pile swells to record levels

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Berkshire Hathaway’s cash pile surged to a record $157bn in a quarter in which chief executive Warren Buffett continued to sell stakes in publicly traded companies, as the so-called Oracle of Omaha found a dearth of appealing investments.

The company sold more than $5bn worth of US and foreign stocks in the third quarter, according to results released on Saturday. The sales lifted Berkshire’s divestments of listed shares to nearly $40bn over the past year.

Investors must wait a further two weeks before they can see how Buffett adjusted Berkshire’s portfolio. But Saturday’s results filing indicated the company sold more than 12mn Chevron shares before it bought Hess for $53bn in an all-stock deal last month.

The value of Berkshire’s portfolio of shares shrank to $319bn from $353bn at the end of June, a decline fuelled by the slide in the broader stock market as investors came to believe that the Federal Reserve would keep interest rates higher for longer.

That has weighed on the valuations of publicly traded companies and prompted some portfolio managers to search for better returns in fixed income markets. The value of Berkshire’s stake in Apple alone dropped by more than $20bn, as shares of the iPhone maker fell 12 per cent in the three months to the end of September.

Buffett’s investment shifts are closely scrutinised by fund managers and the wider public alike for clues as to where the 93-year-old investor sees attractive returns.

He directed the proceeds from the stock sales, as well as the cash flows Berkshire’s many businesses generated, into cash and Treasury bills. The company’s cash pile surged during the quarter by nearly $10bn to a record $157.2bn, a sum that gives it formidable firepower for acquisitions.

Berkshire has been one of the big beneficiaries of rising US interest rates, which have climbed above 5 per cent…

2023-11-04 14:36:23

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