Welcome to Yahoo Finance's flagship show, Morning Brief. I'm Julie Hyman. Let's get to the three things you need to know today.First up, US stock futures kicking off November trading in positive territory. Investors gearing up for a busy week of earnings where we'll see results from AMD, Palunteer, Qualcomm, as well as others. Plus, Berkshire Hathway already out with its earnings.The company posted a solid performance in its insurance business. Its cash pile rose to a record $381.7% billion. But the company ...

Berkshire Hathaway - Berkshire Hathaway has reached a record cash pile of $381 billion, with earnings increasing by 33% [1][2] - The company's operating profit from insurance underwriting, particularly Geico, rose to $13.5 billion from $10.1 billion a year ago, aided by low catastrophe losses [2] - Berkshire was a net seller of equities, selling $12.5 billion and buying $6.4 billion during the period [2] - This report marks the final earnings announcement under Warren Buffett's leadership, with Greg Ael set to take over [3][4] - Shares have underperformed the S&P 500 this year, raising concerns among investors about future performance [5] ON Semiconductor - ON Semiconductor reported adjusted earnings of 63 cents per share, exceeding expectations, with revenue of $1.55 billion [6] - The company's automotive chip segment has faced challenges, with auto revenue hitting a three-year low, although management indicates conditions are improving [7][8] - There is potential for growth as demand may shift towards power management and sensors, positioning the company for the AI hardware boom [8] Cisco - Cisco received an upgrade from UBS, raising its price target from $74 to $88, indicating a potential upside of about 20% [10][11] - The upgrade is driven by growing demand for technology related to AI and data centers, with Cisco reportedly pulling in over $2 billion in AI-related orders this year [11][12] - Cisco is expected to benefit from an upgrade cycle as customers replace older networking gear, with security also seen as a bright spot for future growth [12][13]

Group 1: American Express - American Express (Amex) has built its business on exclusivity and premium service, attracting affluent customers with its perks and reliability [1] - Amex operates uniquely by issuing its own cards and running its own network, allowing it to capture fees from both merchants and cardholders [6] - The company has faced pushback due to rising fees, but it aims to ensure that its value proposition matches or exceeds these increases, particularly focusing on growth among millennials and Gen-Z [7] Group 2: Apple - Apple remains a leader in consumer tech hardware, maintaining strong brand loyalty despite a lack of groundbreaking new products [2] - The company's total revenue, iPhone revenue, and earnings per share reached record highs in its fiscal third quarter, with services revenue also setting an all-time high [1] - Apple's stock has underperformed compared to the S&P 500 over the past year, attributed to its slower pace in AI development compared to other tech stocks [3] Group 3: Bank of America - Bank of America is the second-largest bank in the U.S. and leads in retail banking, with around $1.2 trillion in consumer deposits and serving 96% of Fortune 1,000 companies [8] - The bank's business is somewhat cyclical, thriving when interest rates rise, but its "too big to fail" status adds a layer of security [9] - Investing in Bank of America is seen as a choice for long-term investors due to its profitability, diversification, and reliable dividend yield above the S&P 500 average [10] Group 4: Coca-Cola - Coca-Cola is one of Berkshire Hathaway's oldest holdings, known for its strong brand, unmatched distribution, and resilience in various economic conditions [11][12] - The company is recognized as a "dividend king," having increased dividends for at least 50 consecutive years, making it a reliable income stock [13]

Core Insights - Berkshire Hathaway reported strong quarterly earnings, showcasing appealing performance from its operating businesses [1] - The company's cash reserves increased to nearly $400 billion, indicating robust cash generation capabilities [1] Group 1: Company Performance - The operating businesses of Berkshire Hathaway demonstrated significant performance in the latest quarterly results [1] - The increase in cash reserves to close to $400 billion reflects the company's strong cash generation and financial health [1] Group 2: Investment Focus - Cash Flow Club emphasizes investing in businesses with strong cash generation and significant durability, aligning with Berkshire Hathaway's characteristics [1] - The community offers resources such as access to a leader's personal income portfolio targeting a yield of over 6%, highlighting a focus on value and income stocks [1]

All right, we got to get to the elephant in the room. When you look at the Bergkshire Hathaway shares, the B-class shares, if you look since May 2nd when B when Warren Buffett said he was going to step down, they're down. They're down over 9% far underperforming the market.Does that mean that people don't want to trade like Warren Buffett or don't want to be like Warren Buffett or do they just not have the same confidence in this particular company. >> Yeah, look, I I I look, you can argue it either way, bu ...

Core Insights - Warren Buffett's 2023 letter highlights Berkshire Hathaway's impressive 3,787,464% gain since 1965, emphasizing the importance of investing in companies that significantly increase their dividends over time [2][3] Investment Strategy - The secret to Berkshire's success lies in its investments in companies like Coca-Cola and American Express, which have provided substantial dividend income, with Berkshire collecting over $1 billion annually from these two investments [3][4] - Coca-Cola and American Express have raised their dividends by 19% and 91%, respectively, since the letter was written, indicating strong growth in income streams [4] Portfolio Overview - Berkshire Hathaway's largest holding is Apple, comprising 22.3% of its portfolio with 280 million shares, and the company has doubled its dividend since Buffett began purchasing shares in 2016 [6] - Berkshire collects $291.2 million annually in dividends from Apple, based on a total investment of approximately $40 billion [8] - Bank of America is the second-largest holding, making up just over 11% of the portfolio with 605 million shares, and has nearly quadrupled its dividend since Buffett converted preferred shares to common shares in 2017, now paying over $675 million in dividends per year [9]

Core Insights - Berkshire Hathaway reported earnings per share of $5.74, slightly exceeding estimates, but revenue of $95.62 billion fell short of expectations [2] - The company's operating profits increased by 34% year-over-year, reaching $13.5 billion, driven by strong performance in insurance and railroads [3] - Berkshire Hathaway's cash reserves reached a record $381.7 billion, providing flexibility for acquisitions and protection against market downturns [3][4] Financial Performance - Earnings per share were reported at $5.74, above the estimated $5.73 [2] - Revenue was $95.62 billion, below the expected $98.70 billion [2] - Operating profits increased by 34% year-over-year, totaling $13.5 billion [3] Sector Performance - Strong performance in the insurance underwriting and service/retail segments contributed to the operating earnings [2] - The insurance and railroad sectors were key drivers of profit growth [3] Valuation Metrics - The company has a P/E ratio of 16.38 and a price-to-sales ratio of 2.78, indicating attractive valuation [4] - A low debt-to-equity ratio of 0.19 and a strong current ratio of 7.72 reflect conservative financial management [4]

Financial Performance - Net earnings attributable to Berkshire shareholders for Q3 2025 reached $30.8 billion, a 17.5% increase from $26.3 billion in Q3 2024[177]. - After-tax corporate investment income increased by $533 million in Q3 2025, totaling $904 million, compared to $371 million in Q3 2024[282]. - Net earnings attributable to Berkshire shareholders were $47.8 billion for the first nine months of 2025[286]. - Consolidated capital expenditures for the first nine months of 2025 were $14.7 billion, including $10.1 billion from BNSF and BHE[292]. - Berkshire's shareholders' equity reached $698.2 billion as of September 30, 2025, an increase of $48.8 billion since December 31, 2024[286]. Insurance Operations - After-tax insurance underwriting earnings increased by $1.6 billion in Q3 2025, primarily due to lower incurred losses from significant catastrophe events[179]. - Losses and loss adjustment expenses declined by $1.2 billion (30.1%) in Q3 2025 and $484 million (4.9%) in the first nine months of 2025 compared to 2024[197]. - Premiums written decreased by $263 million (4.8%) in Q3 2025 and $1.1 billion (6.4%) in the first nine months of 2025 compared to 2024, primarily due to volume reductions in property business[203]. - GEICO's premiums written increased by $563 million (5.0%) in Q3 2025, reflecting an increase in policies-in-force[190]. - Losses and loss adjustment expenses for GEICO rose by $413 million (5.4%) in Q3 2025 compared to Q3 2024, with a loss ratio of 71.5%[191]. Energy Sector - Berkshire Hathaway Energy (BHE) reported a decline in after-tax earnings of $140 million (8.6%) in Q3 2025, attributed to lower earnings in U.S. utilities and natural gas pipelines[180]. - BHE's net earnings attributable to Berkshire shareholders for Q3 2025 were $1,489 million, a decrease of 16.3% from $1,629 million in Q3 2024[232]. - The U.S. utilities' electric utility margin was $2.6 billion in Q3 2025, a 6.8% increase from 2024, and $6.6 billion for the first nine months, up 9.9%[237]. - BHE's effective income tax rate for Q3 2025 was (66.4)%, compared to (64.3)% in Q3 2024, reflecting significant production tax credits from wind-powered electricity generation[232]. - The One Big Beautiful Bill Act (OBBBA) enacted on July 4, 2025, may impact BHE's financial results and capital expenditures related to renewable energy projects, though the exact implications are currently uncertain[233]. Transportation Sector - BNSF's after-tax earnings rose by $66 million (4.8%) in Q3 2025 compared to Q3 2024, driven by core pricing gains and improved operating efficiencies[180]. - BNSF's railroad operating revenues for Q3 2025 were $5,988 million, a slight increase from $5,881 million in Q3 2024[221]. - Pre-tax earnings for BNSF increased by 3.6% in Q3 2025 to $1,912 million, and by 6.8% year-to-date to $5,324 million compared to the same periods in 2024[223]. - BNSF's total car/unit volumes increased by 0.8% in Q3 2025 and 2.1% in the first nine months compared to 2024[222]. - Operating revenues from agricultural and energy products increased by 6.3% in Q3 2025 to $1,600 million compared to 2024[226]. Manufacturing and Retail - Manufacturing, service, and retailing businesses saw after-tax earnings increase by $274 million (8.2%) in Q3 2025 compared to Q3 2024[181]. - Manufacturing revenues reached $20.0 billion in Q3 2025, a 1.9% increase from 2024[244]. - Pre-tax earnings in manufacturing increased by 14.3% in Q3 2025 compared to 2024[244]. - Financial services revenues increased 12.0% in Q3 2025 and 13.6% in the first nine months of 2025, driven by higher average loan balances and interest rates[257]. - Retailing group aggregate revenues increased 2.7% in Q3 2025 and 3.5% in the first nine months of 2025 compared to 2024[271]. Investment Gains - Investment gains for Q3 2025 were $21.9 billion, up from $20.5 billion in Q3 2024, with net earnings of $17.3 billion[277]. - Pre-tax investment gains included unrealized gains of $20.6 billion in Q3 2025, compared to $18.6 billion in Q3 2024[278]. - Taxable investment gains were $10.4 billion in Q3 2025, down from $23.4 billion in Q3 2024[278]. Debt and Cash Management - Consolidated borrowings were $127.2 billion as of September 30, 2025, with Berkshire's outstanding debt at $22.5 billion[289]. - Cash, cash equivalents, and U.S. Treasury Bills held by insurance and other businesses totaled $354.3 billion[288]. - Berkshire's consolidated cash, cash equivalents, and U.S. Treasury Bills holdings must remain above $30 billion to allow for stock repurchases[312]. Shareholder Actions - Berkshire's common stock repurchase program allows for repurchases when the price is below intrinsic value, with no shares repurchased in Q3 2025[311]. - The repurchase program does not specify a maximum number of shares or obligate Berkshire to repurchase any specific dollar amount, and there is no expiration date[312]. - The company has not repurchased any Class A or Class B shares in July, August, or September 2025[312]. Legal and Regulatory Matters - Berkshire believes that ongoing legal actions will not have a material effect on its financial condition or results of operations[309]. - Significant business risks are outlined in Item 1A of Form 10-K for the year ended December 31, 2024, indicating potential impacts on business operations[310]. - No defaults upon senior securities have been reported[313]. - Information regarding mine safety violations is disclosed in accordance with the Dodd-Frank Reform Act[314].

Core Insights - Warren Buffett has transitioned from being a net buyer to a net seller of stocks over the past 12 quarters, selling approximately $24 billion worth of stock in 2025 while still finding attractive investment opportunities [1][2] Company Insights - Buffett has made a notable investment in Lennar, purchasing around $779 million worth of shares, indicating a strong belief in the company's potential [2] - Berkshire Hathaway has significantly increased its stake in Lennar, acquiring approximately 1.93 million Class A shares in Q1 2025 and adding around 5.1 million shares in Q2 [5] - Lennar's forward price-to-earnings ratio is below 14, which is attractive compared to the S&P 500's ratio of 23.5, suggesting a favorable valuation in a market that is otherwise highly priced [5] - The company has been actively repurchasing its shares, with around $517 million in buybacks in the quarter ending May 31, 2025, and another $506 million in Q2 [6] Industry Insights - The housing market is perceived as a significant opportunity, as indicated by Buffett's investments in both Lennar and D.R. Horton, the latter being the largest homebuilder in the U.S. by volume [9] - There is a notable housing shortage in the U.S., estimated to be between 2.8 million to 4.7 million homes, highlighting the demand for new housing developments [10]

Core Insights - The article emphasizes the importance of investing in companies with a strong history of dividend growth, particularly those classified as Dividend Kings, which have increased dividends for at least 50 consecutive years [1][2] Investment Strategy - A good company is often defined by its ability to pay and grow dividends over time, aligning with Benjamin Graham's advice to focus on long-term dividend payers [2] - Warren Buffett's investment philosophy suggests buying good companies at attractive prices and holding them for the long term, which is a strategy that can be adapted by individual investors [3][11] Investment Approach - For passive investors, buying an S&P 500 index fund and consistently adding to it is recommended as a sound strategy, allowing for dollar-cost averaging [4] - Berkshire Hathaway serves as an example of a successful investment vehicle, owning a diverse range of companies and demonstrating strong long-term performance [5] Stock Selection Criteria - Investors should focus on companies with understandable business models and long-term growth potential, supported by thorough analysis of quarterly earnings and annual reports [7] - Stocks with historically high dividend yields are often attractively priced, making them a good focus for long-term dividend investors [8] - Traditional valuation metrics such as price-to-sales and price-to-book ratios should be used to confirm the attractiveness of a stock's price relative to its dividend yield [9][10] Long-Term Investment Philosophy - Holding investments for the long term is crucial, as it allows investors to benefit from the growth of the companies they own, exemplified by companies like PepsiCo [11] - Investors are advised to limit their stock purchases to a small number, ideally 20 or fewer, to maintain focus and avoid overtrading [12][13]