If you handed most people nearly $400 billion, they’d find plenty of silly ways to squander it. Warren Buffett isn’t most people.
The legendary investor — known for his patience, discipline, and love of a bargain — said last year that he would happily put $100 billion to work if the right opportunity arose. But he resisted any urge to go on a last-ditch spending spree in his final quarter as Berkshire Hathaway CEO.
The message to shareholders from Berkshire’s fourth-quarter earnings report, released Saturday, is that Buffett once again struggled to find much worth buying.
That’s been the situation for years now with stocks trading near record highs and bidding wars breaking out over acquisitions.
Buffett and his team were net sellers of stocks for a 13th straight quarter in the three months ended December 31. The last time they bought more stocks than they sold was the third quarter of 2022.
Berkshire’s recent portfolio disclosure showed that it built a small stake in The New York Times Company, pared its key bets on Apple and Bank of America, and cut 77% of a small Amazon position in the period.
Buffett refrained from stock buybacks for a sixth consecutive quarter, after repurchasing around $17 billion worth of Berkshire shares over the course of 2022 and 2023.
The stock sales and lack of buybacks contributed to Berkshire’s pile of cash and Treasury bills reaching a record $373 billion after payables at December’s close.
Berkshire’s cash pile was around $130 billion at the end of 2022, meaning it’s nearly tripled in size over the last three years. It now exceeds the current market capitalizations of some of the world’s biggest companies, including Bank of America, General Electric, and Coca-Cola.
Buffett shocked the business world last May when he unexpectedly announced to an arena full of his shareholders that he planned to retire before the new year. He’s spent the last six decades transforming Berkshire from a failing textile mill into a $1 trillion conglomerate.
Berkshire’s new CEO, Greg Abel, said in his inaugural letter to shareholders on Saturday that he wouldn’t rush to pay out dividends or cut deals just to put the money to work.
Abel has plenty of work to do after a challenging fourth quarter. Berkshire’s operating earnings slumped 30% year-on-year to $10.2 billion.
The decline reflected a sharp drop in profits from its key insurance unit, which more than offset higher earnings at the BNSF Railway and in Berkshire’s manufacturing, service, and retailing division.
