Core Insights - Berkshire Hathaway and its CEO Warren Buffett have been net sellers of stocks for 11 consecutive quarters, with Q2 seeing $4 billion in purchases and $7 billion in sales [2][10] - The company has not repurchased any of its own stock since May 2024, with the price-to-book (P/B) ratio currently at 1.5 times, down from 1.8 times earlier this year [3][4] - Berkshire Hathaway holds a significant cash reserve of $344 billion, indicating Buffett's belief that stock valuations remain too high [5][10] Financial Performance - In Q2, Berkshire's after-tax operating profit fell 4% to $11.2 billion, primarily due to currency fluctuations [7] - The company's Burlington Northern Santa Fe railroad saw a 20% increase in operating income, while its utility portfolio experienced a 7% profit increase [7] - Insurance underwriting profit decreased by 12%, and potential impacts from recent legislation could affect the utility business due to reduced tax credits for renewable energy [7] Investment Strategy - Buffett emphasizes the importance of investing in good businesses for long-term cash utilization, but acknowledges the challenges of making large investments due to Berkshire's size [6] - The current strategy of reducing equity positions and avoiding stock buybacks suggests a cautious outlook on the market, including Berkshire's own stock [10][11] - Investors are advised to consider a dollar-cost averaging strategy rather than attempting to time the market, with ETFs and Berkshire stock being viable options [12]
Warren Buffett and Berkshire Hathaway Remain Cautious as Stocks Soar. Should Investors Follow Suit?