Berkshire Hathaway is holding on to more cash than ever, highlighting a cautious stance in the equity markets even as the company posts strong quarterly earnings.The conglomerate, led by Warren Buffett, reported that its cash balance has reached $381.7 billion, the highest in the firm’s history.The figure swelled further after the company continued to offload shares instead of buying them.In the quarter ending September, Berkshire sold around $12.4 billion worth of stocks and bought approximately $6.4 billion, according to Barron’s. At present, Berkshire’s equity portfolio is valued at roughly $283 billion.The activity made the company a net seller by $6 billion for the period, extending a pattern first seen in early 2022.It marks the 12th consecutive quarter in which Berkshire has sold more stocks than it has purchased, ET reported.Despite Buffett’s position as one of the most prominent advocates of long-term investing, the firm has now spent three years reducing its equity exposure. The last time Berkshire held a similar level of cash was during the early stages of the pandemic, when global markets were unstable.The cautious stance is also visible in the company’s decision to avoid buybacks.Berkshire has not repurchased any of its own shares for five consecutive quarters, a notable shift given that buybacks had long served as a preferred method for deploying excess capital. As James Shanahan of Edward Jones told Reuters, “If you feel like stocks are expensive, including your own shares, you’re eventually going to be right, but you can be wrong for a long time.”However, even with the conservative investment approach, Berkshire delivered strong results.Operating profit increased 34% from the same quarter last year to $13.49 billion, and net income rose 17% to $30.8 billion, helped by lower insurance losses and currency gains.Performance across Berkshire’s operating companies varied. Geico reported an increase in costs, likely tied to higher advertising spending. BNSF, the group’s railroad arm, reported a 6% rise in profit driven by lower fuel prices and improved efficiency. Meanwhile, the energy business posted a 9% decline in profit because of wildfire-related legal expenses and cost overruns involving its utilities segment.Berkshire Hathaway’s recent moves in cash and stock holdings are being watched for hints about its market outlook. The company still holds a few major investments that have produced strong returns, keeping its roughly $283-billion equity portfolio focused on those names.But its continued selling suggests Buffett’s team isn’t finding many good deals in the current market rally, especially with high US interest rates and uneven earnings growth.According to an ET report, this quarter comes at a turning point for Berkshire. Buffett, now 95, is preparing to hand over the CEO position at year-end to Greg Abel, the company’s vice chairman. Buffett will remain as chairman. Abel, 63, will inherit a vast cash reserve and the responsibility of deciding how to deploy it.One of the few recent major transactions was Berkshire’s commitment of $9.7 billion to purchase Occidental Petroleum’s chemical unit. The large outlay has not eased questions over how the rest of the cash pile will be used. Some investors have speculated about the possibility of Berkshire paying a dividend for the first time since 1967, but the company has offered no confirmation.
