Warren Buffett Keeps Playing Stock Market Defense As Berkshire Cash
Warren Buffett continues to play defense in the stock market, reducing Berkshire Hathaway (BRKB) exposure to equities yet again. Berkshire Hathaway’s cash pile hit another record.
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On Saturday, Berkshire Hathaway released its third-quarter report. Berkshire equity sales were a net $1.95 billion, up from $1.1 billion in the second quarter but down from Q1’s $3.9 billion. It’s the fourth straight quarter that Warren Buffett has been a net seller of stocks.
Buffett has been a big buyer in the ultimate Warren Buffett stock. Berkshire bought back $7.6 billion in BRKB stock, up from $6 billion in Q2 and $6.6 billion in Q1. Year to date, BRKB stock buybacks total $20.6 billion vs. $24.7 billion for all of 2020.
Berkshire Hathaway cash on swelled to $149.2 billion as of Sept. 30. That’s up from $144.1 billion at the end of Q2 and $145.4 billion at the end of Q1.
Buffett’s stock portfolio remains highly concentrated. In Q3, 68% of its value was comprised of Apple (AAPL) ($120.4 billion), Bank of America (BAC) ($31.3 billion), American Express (AXP) ($18.3 billion), and Coca-Cola (KO) ($21.9 billion).
It’s a Dow-heavy investment portfolio. Apple stock, American Express and Coca-Cola are all Dow Jones components.
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Berkshire Earnings
Berkshire Hathaway earnings, which include investments and derivatives, fell to $10.34 billion from $30.14 billion a year earlier. Berkshire earnings on a GAAP basis can be very volatile.
Berkshire earnings rose 18% on an operating basis to $6.882 billion. Higher profit at its railroad, utilities and energy divisions offset a larger insurance underwriting loss.
BRKB Stock
BRKB stock edged up 0.1% to 287.88 in Friday’s market trading. Shares have a 292.32 handle buy point in a consolidation going back six months.
However, the relative strength line for BKRB stock has fallen to an eight-month low. The RS line, the blue line in the chart provided, tracks a stock’s performance vs. the S&P 500 index.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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