Warren Buffett’s Berkshire Hathaway sold billions of dollars in stock and invested little money in the US stock market in the first three months of the year, as the popular investor saw little interest in a volatile market.
Berkshires It revealed on Saturday that it sold $13.3 billion worth of shares in the first quarter and bought shares worth only a fraction of that amount. Instead, he invested $4.4 billion in repurchases of his own stock, as well as $2.9 billion in the shares of other publicly traded companies.
The figures underscore the struggle Berkshire faces to put its mountain of cash to work at times when Buffett and his longtime right-hand man Charlie Munger find valuations unappealing. The company’s cash has increased by $2 billion since the beginning of this year to $130.6 billion, the highest level since the end of 2021.
Munger last month he told the Financial Times that investors should lower their expectations of stock market returns as the Federal Reserve raises interest rates and the economy slows.
Berkshire reported earnings of $35.5 billion in the first quarter, or $24,377 per Class A share, driven largely by a stock rally that boosted the value of its stock portfolio by $328 billion. Profit increased from $5.6 billion a year earlier.
Operating earnings — Buffett’s preferred performance measure for Berkshire’s diverse group of companies — rose 12.6% from a year earlier to $8.1 billion. For the first time, the figure includes results from truck company Pilot Flying J, which Berkshire took majority control of in January.
The figures were released hours before Buffett and three other Berkshire executives took the stage in downtown Omaha where tens of thousands of shareholders gathered for the company’s annual meeting.
Shareholders will hear the 92-year-old billionaire and his vice chairmen Munger, Gregory Abel and Ajit Jain discuss the economy, the Fed’s efforts to reduce inflation and Berkshire itself.
The four men are likely to be prompted as to why the sprawling conglomerate hasn’t made a substantial investment in the US banking sector, as it did in the midst of the financial crisis.
At the time, the Berkshire capital helped support both Goldman Sachs and Bank of America. The latter is now a key holding in the company’s equity portfolio.
Shares of Berkshire are up 4.9% since the beginning of this year.
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