Berkshire Hathaway’s third-quarter earnings report released Saturday revealed that Warren Buffett continued to sell more shares than he bought, with the legendary investor set to step down as CEO by the end of the year.
The conglomerate sold $12.5 billion worth of shares in the latest period and bought $6.4 billion worth, marking the 12th consecutive quarter of net sales. More details on specific actions will be provided in a separate regulatory filing later this month.
Meanwhile, Berkshire’s cash reserve hit a new record of $382 billion as operating profit jumped 34% while Buffett delayed his stock buyback for the fifth straight quarter.
As the company’s stock portfolio shrank, money moved into Treasury debt. But with the recent decline in short-term rates, Berkshire’s third-quarter net investment income fell 13%, to $3.2 billion.
The cautious stance on stock investing began in 2022, when the Federal Reserve launched its most aggressive rate-raising campaign in more than 40 years to curb inflation.
This squeeze hit stock valuations, but apparently not enough to trigger Buffett’s bargain-hunting instinct. The Fed’s subsequent reversal toward rate cuts then sparked a rally that sent stocks to new highs.
More recently, the massive market sell-off in April after President Donald Trump unveiled his shocking tariffs didn’t bring Buffett off the sidelines either. In the second quarter, Berkshire sold $3 billion worth of stock on a net basis.
Markets quickly rebounded and reached new highs a few months later, with AI-related companies leading the way. In contrast, shares of Berkshire Hathaway have lost 12% since May, when Buffett announced he would step down as CEO by the end of the year and hand the job over to Greg Abel.
Although Buffett is expected to remain president, he may be wary of taking dramatic steps to clear the decks of Abel, who had already assumed a larger leadership role before May.
But last month, Berkshire Hathaway agreed to buy the chemicals business of oil giant Occidental Petroleum for nearly $10 billion, in what could mark the last big deal of his career. It is also expected to boost Berkshire’s stake to nearly 30% in parent company Occidental.
The Oct. 2 acquisition, Berkshire’s largest since purchasing insurer Alleghany in 2022, was Berkshire’s first-ever announcement citing Abel and not mentioning the current chief executive’s name.
“It’s great. It’s definitely a positive for Berkshire because it also helps the company they own 30% of,” said Doug Leggate, energy analyst at Wolfe Research. Fortune last month. “It’s completely selfish, it’s logical and, without any danger, it’s really useful.”
