:max_bytes(150000):strip_icc()/Apple-News-Image---How-to-Invest-Like-Warren-Buffett-final-9c3f954d6d2d4677af76f5530292de13.jpg "How Warren Buffett’s Berkshire Hathaway increased its cash holdings by selling more shares")
How Warren Buffett’s Berkshire Hathaway increased its cash holdings by selling more shares
Key findings
- Berkshire Hathaway’s cash and U.S. Treasury holdings rose to a record $276.9 billion in the second quarter as the company reduced its holdings of Apple and other stocks.
- Although the company created some new positions and added to some of its equity holdings in the second quarter, Berkshire still lost more stock holdings than it gained, according to filings this week.
- Berkshire’s multi-quarter sell-off sparked speculation that Warren Buffett might be worried about the market overheating, raising money for his successors, or unimpressed with other options.
- Back in May, Buffett said Berkshire was building up its liquidity position and that the “situation was not attractive.” He suggested that it would be difficult to find strong candidates that met Berkshire’s criteria.
Warren Buffett’s Berkshire Hathaway (BRK.A, BRK.B) added some new positions and added to some of its equity holdings in the second quarter, according to filings this week. However, the company trimmed more than it added to its equity holdings, pushing Berkshire Hathaway’s cash and U.S. Treasury holdings to a record $276.9 billion.
Since well over half of this amount, a total of $234.6 billion, was invested in Treasury bonds, Buffett actually owned more Treasury bonds than the U.S. Federal Reserve at the end of the second quarter.
The company added new positions in Ulta Beauty (ULTA) and Heico (HEI) in the second quarter, while increasing its holdings in Occidental Petroleum (OXY) and Chubb (CB), among others. However, it reduced its holdings in Apple (AAPL), Chevron (CVX), Capital One (COF) and others.
Recent filings show that the company also reduced its stake in Bank of America (BAC) in July after the end of the quarter.
The size of Berkshire’s growing cash pile and the wave of selling over several quarters have sparked speculation that Buffett may be worried about the market overheating, raising money for his successors or unimpressed with other options.
Back in May, Buffett said Berkshire was building up its liquidity position and suggested it was difficult to find investment opportunities that met Berkshire’s criteria.
“It’s just that things are not attractive,” he said, adding: “There are certain opportunities to change. We’ll see if that happens.”
