Warren Buffett will meet with Berkshire Hathaway shareholders ahead of its annual meeting on May 3, 2024 in Omaha, Nebraska.
David A. Grogan
Berkshire HathawayThe company’s cash pile surged to a record $276.9 billion last quarter as Buffett sold a slew of shares, including apple.
The Omaha-based conglomerate’s cash hoard jumped significantly higher from the previous record of $189 billion, set in the first quarter of 2024. The increase came after the Oracle of Omaha sold nearly half of his stake in Tim Cook-led tech giant in the second One quarter.
Berkshire has sold off its stock for seven consecutive 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. Filings this week showed that Buffett’s third-quarter selloff continued in some areas, with Berkshire Hathaway reducing its second-largest stake in Bank of America for 12 days in a row.
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 it, but we won’t spend it unless we think [a business is] Doing something that takes very little risk but makes us a lot of money,” the investing icon said at the time. “I wasn’t on a hunger strike or anything like that. It was just…things weren’t 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.
BNSF Railroad’s profit was $1.6 billion, consistent with last year’s figure. Profit from Berkshire Hathaway’s energy utilities business fell to $326 million, nearly 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.”
