Core Insights - Berkshire Hathaway's cash stockpile reached a record high of $381.7 billion, with third-quarter operating earnings increasing to $13.5 billion from $10.1 billion a year ago, primarily driven by a surge in insurance income [2][7] - The company has not engaged in any share buybacks, marking one of the longest periods without buybacks since 2018, which typically indicates a belief that shares are undervalued [6][8] - Investors are closely monitoring the company due to CEO Warren Buffett's impending retirement, with Berkshire's class B shares rising 6.1% this year, lagging behind the S&P 500 index's 16.3% increase [3][9] Cash Holdings - Berkshire's cash and equivalent holdings increased from $344.1 billion in the second quarter, with the majority invested in short-term Treasury bills, viewed as "dry powder" for future investments [4][5] - The record cash pile suggests that Buffett may be waiting for favorable investment opportunities, as holding cash and Treasury bills generates low-risk yields [5] Shareholder Implications - The absence of share buybacks could impact investor returns, as buybacks typically increase the earnings per share by reducing the number of shares outstanding [8] - Analysts suggest that the company's stock growth may be affected by a decline in the so-called "Buffett premium," which has historically contributed to the company's valuation [10]
Berkshire Hathaway’s Record Cash Pile Could Signal Buffett Is Waiting for Better Opportunities