Berkshire holds $397B cash hoard

Berkshire Hathaway is doing the most Berkshire Hathaway thing possible — piling up cash while everyone waits for a big move. The company finished th(berkshirehathaway.com), the biggest stash in its history. That happened in Greg Abel’s first full quarter as CEO, with Warren Buffett now serving as chairman. Th(berkshirehathaway.com)aving a hard time finding enough places to put all that money to work. (berkshirehathaway.com)s signal about Berkshire’s view of the market. This is a company built to hunt for large deals, buy public stocks when they look cheap, and occasionally buy back its own shares. When the pile gets this big, it usually means management thinks prices are too rich, opportunities are too scarce, or both. (sahmcapital.com) ### What did Berkshire actually do this quarter? It kept selling stocks(berkshirehathaway.com)uarter, which made this the 14th straight quarter as a net seller. It also spent $9.5 billion in January to buy Occidental Petroleum’s chemicals business, so this was not pure inactivity. But the broad pattern is still caution — less enthusiasm for public equities, no giant elephant-sized acquisition, and only a very small amount of buybacks. (sahmcapital.com) got a little lost behind the cash headline. Operating earnings rose to $11.346 billion from $9.641 billion a year earlier, up about 18%. Net income came in at $10.106 billion, but Berkshire itself keeps warning people not to lean too hard on that figure because accounting rules make quarterly investment gains and losses noisy. The cleaner read is that the operating businesses had a solid quarter. (berkshirehathaway.com) ### Where did t(sahmcapital.com) twice — once through underwriting profit and again through the investment income earned on the float. When short-term Treasury yields are still reasonably attractive, a giant cash pile is not dead money in the way it would be in a near-zero-rate world. That softens the drag from waiting. (berkshirehathaway.com) ### So why not just buy back more stock? That is the obvious question. Berkshire did repurchase about $234 (berkshirehathaway.com)24, but that amount is tiny relative to a nearly $400 billion cash hoard. It also did no repurchases in the first two weeks of April. Basically, Abel is signaling that Berkshire stock is not screamingly cheap either — at least not cheap enough to absorb cash at scale. (money.usnews.com) ### Is this really about Greg Abel? Partly. The numbe(berkshirehathaway.com)lue to how Abel will run Berkshire. So far, the answer looks familiar. He has not rushed into a splashy acquisition to prove he is decisive. He has not emptied the vault into buybacks. He looks disciplined in the Buffett mold — which is reassuring for some shareholders, but it also means the “what’s the plan for all this cash?” question is only getting louder. (sahmcapital.com)afety and optionality, but it also creates pressure. If markets keep rising, sitting on hundreds of billions can look cautious to the point of costly. The pile is like dry powder that keeps getting drier — useful in a panic, but awkward if no fire sale arrives. Investors love the protection, but they also want to know when that protection turns back into offense. (sahmcapital.com)ling more stocks than it buys, and holding an almost absurd amount of liquidity because it still does not see enough bargains worth swinging at. That tells you a lot about how Abel’s Berkshire sees this market right now. (berkshirehathaway.com)