Warren Buffett's Berkshire Hathaway sold another $3 billion of stocks as investor enters home stretch as CEO

Core Insights - Berkshire Hathaway reported a 4% decline in operating earnings, totaling $11.2 billion, in its first earnings report since the announcement of Warren Buffett's planned succession as CEO [1] - The decrease in earnings was primarily due to reduced insurance underwriting profits, despite increased income from BNSF Railway, Berkshire Hathaway Energy, and the manufacturing, service, and retailing divisions [1] Financial Performance - A significant factor in the earnings decline was an $877 million foreign currency exchange loss related to non-dollar debt, contrasting with a $446 million gain in the same quarter last year [2] - The company sold a net $3 billion in stocks during the last quarter, purchasing $3.9 billion but selling $6.9 billion, marking the 11th consecutive quarter as a net seller of stocks [2] Cash Position and Investments - Berkshire Hathaway currently holds a cash reserve of $344 billion, exceeding the market capitalization of major companies like Coca-Cola and Bank of America [3] - The company did not repurchase any shares last quarter and wrote down its 27% stake in Kraft Heinz by approximately $5 billion, reducing its carrying value to $8.4 billion [3] Market Conditions - High valuations for public stocks, private companies, and Berkshire's own shares have limited buying opportunities for the company [4] - The increase in cash reserves to record levels has been influenced by the lack of attractive investment opportunities and the reduction of key stock positions, including Apple and Bank of America [8] Stock Performance - Despite outperforming the S&P index prior to the annual meeting in May, Berkshire's stock has recently underperformed, which some analysts attribute to the loss of a "Buffett premium" [9]