Billionaire Warren Buffett is now sitting on more than US$325 billion in cash after continuing to unload billions of US dollars worth of Apple Inc and Bank of America Corp shares this year and continuing to collect a steady stream of profits from all of Berkshire Hathaway Inc’s assorted businesses without finding any major acquisitions.
Berkshire on Saturday said it sold off about 100 million more Apple shares in the third quarter after halving its massive investment in the iPhone maker the previous quarter.
The remaining stake of about 300 million shares was valued at US$69.9 billion at the end of September.
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It remains Berkshire’s biggest single investment, but has been cut drastically since the end of last year when it was worth US$174.3 billion.
Investors would also be disappointed to learn that Berkshire did not repurchase any of its own shares in the quarter.
Shareholders would wonder why Buffett is continuing to accumulate so much cash, CFRA Research analyst Cathy Seifert said.
“Are they more pessimistic about the future economic and market picture than perhaps others are?” she said.
Buffett said at the company’s annual meeting in May that part of why he began selling some of his Apple shares is that he expects tax rates to go higher.
However, Edward Jones & Co analyst Jim Shanahan said he wonders if part of the reason Buffett started selling Apple is tied to the death of Berkshire vice chairman Charlie Munger last year, because the sales began shortly after his death.
Buffett has never been as comfortable with technology businesses as his longtime partner was, Shanahan said.
“If Charlie Munger were still alive, perhaps he wouldn’t have sold down the position quite as aggressively — maybe at all,” Shanahan said.
Berkshire on Saturday said investment gains again drove its third-quarter profit skyward to US$26.25 billion, or US$18,272 per Class A share.
A year ago, unrealized paper investment losses dragged the conglomerate’s earnings down to a loss of US$12.77 billion, or US$8,824 per Class A share.
Operating earnings were only down about 6 percent at US$10.09 billion, or US$7,023.01 per Class A share, compared with last year’s US$10.8 billion, or US$7,437.15 per Class A share, Berkshire said.
Revenue did not change much at US$92.995 billion. A year ago, it reported US$93.21 billion in revenue.
Berkshire owns an assortment of insurance businesses, including Geico Corp, along with BNSF Railway Co, several major utilities, and a varied collection of retail and manufacturing businesses, including brands such as Dairy Queen and See’s Candy.
Berkshire vice chairman Greg Abel is slated to succeed the 94-year-old Buffett as chief executive officer in the event of his death.
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