Track market-moving stories before they get noisy

Berkshire Hathaway just clawed back to a record high, but the force driving it there has little to do with Warren Buffett's legacy and everything to do with a rotation that could reverse just as fast as it arrived.

Berkshire Hathaway (NYSE:BRK-B | BRK-B Price Prediction) Class B shares closed at a record $539.82 on Tuesday, October 20, 2026, after a 1.43% gain. The old high was the $539.80 close on May 2, 2025, set the Friday before Warren Buffett told shareholders he would hand over the CEO job, so the new record beat it by just two cents.

Getting back there took 17 months. Over that time, the S&P 500 gained more than 35% while Berkshire stayed below its old high.

On October 21, both share classes set intraday records, with Class B reaching $543.34. Class B then closed at the day’s low of $538.99, down 0.15%, which left it slightly below the October 20 record close.

Berkshire’s market value at that close was about $1.16 trillion. Most of the push to the record came from investors pulling money out of AI stocks, and that rotation will likely determine how long the record holds.

Money Leaving AI Stocks Landed in Berkshire The S&P 500 set a record on October 6 and has slipped since then, while Berkshire gained about 7%. From October 6 through October 20, the iShares Semiconductor ETF (NASDAQ:SOXX) fell in 10 of 11 sessions and lost 15.17%, while Berkshire rose in nine.

That run included a 10-day winning streak, Berkshire’s first since 2018. Investors pulling out of crowded chip trades looked for profits that hold up whether AI spending does, and Berkshire offers that through its insurance, BNSF railroad, utility and consumer businesses, plus a large cash cushion.

Abel Is Putting the Cash to Work In the second quarter, Berkshire bought back $4.5 billion of its own stock and put $23.5 billion into other stocks, including $10 billion in Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOGL). That ended 14 straight quarters of net stock selling, and cash fell to $364.7 billion from a record $380.2 billion.

Buybacks matter because they show management thinks the shares trade below intrinsic value, meaning the company’s underlying worth. Operating profit rose 16% to $12.98 billion, a quarter KBW analyst Meyer Shields called “very solid.”

Buffett already did the stock-picking work for a lifetime, and the cheapest dividend payers still sitting inside Berkshire’s own book are worth a look (we ranked the seven cheapest in a free guide here: 7 Warren Buffett Stocks to Buy Now).

Succession Doubts Are Fading On September 18, 2026, Buffett, then 96, stepped down as chairman and became chairman emeritus. His son Howard Buffett, a board member since 1993, became non-executive chairman; Buffett stayed on as a director, and he wrote that “Howard will guard its culture and values.”

The stock hit its low about two weeks after the chairman change was announced. Investors wanted proof that Berkshire runs well without Buffett at the top, and rising profits plus buybacks under Abel, CEO since the start of 2026, gave them that proof.

What Could Stall the Rally If AI stocks bounce back, the money that moved into Berkshire could move right back out. The chip ETF rose 2.07% on October 21, the same day Berkshire slipped from its intraday high.

Traders are treating $540 as the key technical level heading into earnings, and Berkshire closed just under it. The upcoming third-quarter report will show whether operating earnings can match the $13.48 billion from the same quarter a year earlier. A record price also gives you less margin of safety than the stock offered while it fell behind.

Should You Buy or Sell BRK-B Stock At a P/E of 11x and a price-to-book of 1.06, Berkshire is modestly priced for a company with rising operating profit and a CEO buying back its shares. Index funds still lean hard on the same AI trade that is now reversing, so they carry more exposure if chip stocks keep falling. Berkshire’s mix of businesses has less direct exposure to that trade.

This view holds if Class B closes above $540 after the third-quarter report and operating earnings come in at or above $13.48 billion. If earnings fall short and the chip ETF wins back its October losses, the rotation is reversing, and the record likely won’t last.

Contact [email protected] for any questions or corrections.

Most investors know Berkshire Hathaway (BRKA +0.09%) (BRKB +0.04%) is a combination of a portfolio of publicly traded stocks and privately owned businesses like GEICO Insurance, Duracell batteries, and Shaw flooring. Is it possible, however, that investors are underestimating just how much cash the conglomerate is collecting from one of its most boring wholly owned companies? It certainly looks that way.

The business in question is the railroad BNSF, although you may know it better as Burlington Northern Santa Fe. Here's a closer look.

All aboard the cash train!
Contrary to a common assumption, Berkshire Hathaway isn't just a collection of companies that former CEO Warren Buffett and current CEO Greg Abel felt good about owning. Every one of its holdings serves a specific purpose. For instance, the vast majority of its privately held businesses are meant to generate reliable cash flow that backs up its insurance operation.

Berkshire also discloses surprisingly detailed information about these businesses. For instance, through the first half of 2026, BNSF has generated just over $2.9 billion in operating earnings, up nearly 10% year over year. That's more than one-tenth of the organization's total operating earnings -- again.

Image source: Berkshire Hathaway Q2-2026 investor report.

Although operating income is a key measure of a business's health, in this instance it's not necessarily the most meaningful one. Arguably more important to a conglomerate like Berkshire is how much cash an investment is reliably putting in its parent company's pockets, whether that investment is private or a publicly traded one.

To this end, as Greg Abel noted in his 2025 letter to Berkshire Hathaway shareholders, published early this year, $4.4 billion of BNSF's $8.1 billion in 2025 operating earnings was handed over to Berkshire in the form of a cash dividend. The railroad company is on pace to at least match these numbers again this year, extending a long-standing track record of real cash generation.

Image source: Getty Images.

The amazing part? Berkshire Hathaway paid only $34.5 billion for BNSF back in 2010. Now 16 years later, the effective dividend yield on this initial investment is a healthy 12.7%, not to mention the appreciation of the railroad's value in the meantime. Although Berkshire itself doesn't offer a specific figure, estimates of its market value range from $75 billion to as much as $200 billion, and Buffett has been willing to say the railroad is the conglomerate's second-most-valuable asset, mostly due to the cash it produces.

More private, less public?
It's just one piece of the Berkshire puzzle, of course, and a relatively small one at that; Berkshire's current market cap stands at a stunning $1.1 trillion.

It's an important detail, though, and an increasingly important one, particularly if the stock market itself decides to unwind its extreme valuation. Although a correction would put widespread bearish pressure on most stocks, since Berkshire Hathaway's value largely consists of privately held companies, its ticker could be well-shielded from any such weakness.

Given this, shareholders might wish Abel would make more outright acquisitions of small cash-cow companies rather than use Berkshire's $365.5 billion in uninvested cash to simply purchase more stocks. The private approach appears to create more long-term value.

For the first time in well over half a century, Berkshire Hathaway (BRKA +1.08%)(BRKB +1.21%) entered the year in uncharted territory. On Dec. 31, Warren Buffett retired as CEO, paving the way for his protégé, Greg Abel, to oversee the company's day-to-day operations and its closely watched $363 billion investment portfolio.

Abel didn't waste much time making his mark. He disposed of 16 stocks in the first quarter and pared down six others, including one of the Oracle of Omaha's core holdings, Bank of America (BAC -0.91%)(also known as BofA).

Warren Buffett has officially passed the baton to Greg Abel. Image source: Getty Images.

In the six quarters leading up to Buffett's retirement, he was a persistent seller of BofA stock. This pattern has continued through Abel's first two quarters as CEO, with Buffett and Abel collectively selling more than 549 million shares since July 2024, or 53% of what had been a 1.03-billion-share position.

The writing looked to be on the wall that Bank of America would get the heave-ho -- but that may not be the case any longer.

Buffett and Abel collectively sold over 549 million shares of Bank of AmericaAs recently as a few months ago, there were three reasons to believe that BofA's time as a prominent Berkshire Hathaway holding would come to an end.

BAC Bank of America$51.23-$0.47 (-0.91%)

NYSE · As of 4:00 PM ET 10/16/26

Firstly, Buffett and Abel have always been sticklers for value. When the Oracle of Omaha first invested in BofA's preferred stock in August 2011, its common stock was trading at a 62% discount to book value. As recently as August, BofA peaked at a 65% premium to book value.

Secondly, Bank of America is the most interest-sensitive of the country's money-center banks. With the Federal Reserve lowering rates six times between September 2024 and December 2025, no large bank was at greater risk of its net interest income shrinking than BofA.

Third and finally, Greg Abel's first annual letter to shareholders excluded Bank of America in his discussion of companies that can compound over multiple decades.

The writing looked to be on the wall that Bank of America would soon get the heave-ho.

Image source: Getty Images.

Greg Abel's tune on Bank of America may have changedWhile additional selling is possible, several catalysts that had made Bank of America stock less attractive have reversed course.

For example, Bank of America's ongoing profitability and prudent lending have allowed its book value per share to steadily rise. When coupled with the recent pullback in BofA's share price, the company's stock is now trading at only a 30% premium to book value following its third-quarter operating results. BofA may not be a screaming bargain like it was in August 2011, but it remains attractive at just a 30% premium to book.

BAC Price to Book Value data by YCharts.

Additionally, the central bank kicked off only its fourth rate-hiking cycle of the century on Sept. 16. According to the CME Group's (CME +1.52%) FedWatch Tool, the odds are incredibly high that the Fed will implement several rate hikes over the next year. As the most interest-sensitive large U.S. bank, BofA's net interest income should benefit.

The narrative surrounding Bank of America appears to be changing, making it less likely that Warren Buffett's successor sends it to the chopping block.

When Warren Buffett stepped down as CEO of Berkshire Hathaway (BRKA +1.08%) (BRKB +1.21%), there were a lot of eyes on his successor, Greg Abel. Would Buffett's replacement follow the Oracle of Omaha's approach to buying stocks?

Less than a year into Abel's tenure, we're getting an answer. Berkshire went on a buying spree during the second quarter, adding to its positions in Alphabet (GOOGL -2.47%) (GOOG -2.32%) and Delta Air Lines (DAL -3.47%). And another purchase stood out -- $4.5 billion of Berkshire Hathaway's own stock.

Here's what that means for investors.

Berkshire Hathaway CEO Greg Abel. Image source: Getty Images.

Berkshire is putting its cash to work For years, Buffett accumulated an enormous cash reserve at Berkshire Hathaway, preferring to wait for attractive investment opportunities rather than overpay for stocks.

That approach helped Berkshire build a reputation for finding companies with strong competitive advantages and buying their shares when they traded below their intrinsic value -- what the underlying business is actually worth.

Abel appears to be following that philosophy, although he's becoming more aggressive about putting Berkshire's money to work.

During the second quarter, Berkshire increased its Alphabet holdings substantially, adding millions of shares of the Google parent company. It also bought an additional 17.5 million shares of Delta, increasing its stake by 44%. Berkshire opened a position in Delta during the first quarter -- Abel's first as CEO -- and now has more than 57 million shares of Delta stock.

BRKB Berkshire Hathaway$532.02+$6.34 (+1.21%)

NYSE · As of 4:00 PM ET 10/16/26

Berkshire ended June with approximately $359.2 billion in cash and short-term investments. Even after its recent purchases, Abel has plenty of money available for additional investments.

Why Berkshire's buybacks matter Berkshire Hathaway spent approximately $235 million buying back shares during the first quarter, then increased that amount to $4.5 billion in the second quarter.

Berkshire has a specific rule governing repurchases. According to its second-quarter regulatory filing, the company can buy back shares only when its CEO determines that the price is below Berkshire's conservatively estimated intrinsic value. So, Abel isn't buying Berkshire shares simply because the company has money available. He's buying because he believes the stock offers value.

Berkshire purchased Class B shares at an average price of $476.01 in May and $487.98 in June. Those figures give investors something useful -- actual prices at which Berkshire's leadership was willing to invest billions of dollars in its own business.

Should you buy Berkshire Hathaway stock, too? One of Berkshire Hathaway's strengths is that it's a conglomerate -- the company owns dozens of businesses, including insurance companies, consumer goods such as Duracell, and iconic brands like Dairy Queen. It also has a huge investment portfolio, with large stakes in blue chip companies like Apple and Bank of America. That means it has exposure to several different parts of the economy.

For investors considering Berkshire Hathaway, the company's recent repurchases provide a useful starting point for evaluating the stock.

After all, when Berkshire's own management is willing to spend billions buying its shares, that's worth a closer look.

Bank of America is an advertising partner of Motley Fool Money. Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, and Berkshire Hathaway. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.

(This is the Warren Buffett Watch newsletter, news and analysis on all things Warren Buffett and Berkshire Hathaway. You can sign up here to receive it every Friday evening in your inbox.)

Berkshire Hathaway shares closed Friday at their highest level since Warren Buffett told shareholders at the May 2025 annual meeting he planned to step down as CEO at the end of that year.

The day before that Saturday surprise, both the Class A and Class B shares had closed at all-time highs.

Over the next three months, they lost more than 14% of their value as investors worried a "Buffett premium" was dissolving.

It's been more than a year since their post-meeting low in August of 2025, and the recovery has not been a straight line, but BRK.A ended Friday at $798,000, just 1.4% below its all-time closing high of $809,350.

The B shares finished at $532.02, also 1.4% under their all-time closing high of $539.80.

A loss Thursday broke a 10-session winning streak that added 5% to Berkshire's stock prices but they rebounded with gains of more than 1% Friday.

CNBC Pro thinks investors may be happy Berkshire is spending some of its big cash pile under CEO Greg Abel, with $4.5 billion of buybacks in Q2, investments in Alphabet, Taylor Morrison Home, Lennar, (although there haven't been any buys of that stock since October 2), and now, Bending Spoons. (More on that below).

It also notes Keefe, Bruyette & Woods analyst Meyer Shields believes higher short-term interest rates are helping to lift the shares.

Berkshire still has roughly $360 billion in cash, "a good symbol of continued patience under the new CEO," and those higher rates mean "they'll be making more money" on that money.

In addition, its insurance operations have benefited from a quiet hurricane season so far.

Higher oil prices are good for its $19 billion stake in Chevron, which closed Friday at an all-time high after gaining almost 36% since the start of July. Berkshire's energy-related subsidiaries are also getting a tailwind.

And recently, Berkshire may be getting a boost as investors shift away from high-flying AI and tech stocks and turn to "old" economy names.

For example, Coca-Cola, a long-time Buffett favorite and now a $37.6 billion holding, also closed Friday at an all-time high, perhaps with some extra help from KFC's switch from Pepsi to Coke. It's up 34% year-to-date.

Berkshire's position has gained $2.4 billion since last Friday, overtaking Alphabet to become the third largest stake in its portfolio. (See the full top 10 below.)

Berkshire's B shares have cut their June 1 deficit of 17.5 percentage points versus the S&P 500 by almost two-thirds.

They are now 6.0 percentage points behind the benchmark for the year.

Atypical bet on 'buzzy' Italian tech company is big win ... so farBerkshire Hathaway's surprising bet of close to $1 billion on Bending Spoons is paying off big, at least in the short term.

The Italian company, which began trading on Nasdaq in the U.S. in July, buys cast-off internet names like AOL, Evernote, and Vimeo, uses AI to cut costs, and deploys the savings to make more acquisitions.

In late July, CNBC Pro said, "Wall Street is buzzing," and "analysts ... see big gains ahead."

The tech stock is decidedly not a typical Berkshire value play, trading at a large multiple to its earnings.

But before Wall Street's open Wednesday morning, a Bending Spoons news release revealed Berkshire is investing a "further" $330 million in the company by purchasing 10 million newly issued shares at $33 per share in a private placement.

That was already an almost 12% discount from Tuesday's closing price of $37.86 and the news sent Bending Spoons shares even higher.

They hit an intraday high of $58.56 before closing up 41% at $53.46 on Wednesday. 

Bending Spoons shares are up 24.3% over the three trading days since the revelation, after giving up a chunk of their earlier gains in Friday's tech sell-off to end at $47.07.

That's a solid 42.6% higher than Berkshire's $33 purchase price for a profit, on paper, of nearly $141 million.

But what's that "further" in Bending Spoon's statement?

The release also disclosed, apparently for the first time, that Berkshire invested $600 million at Bending Spoon's IPO more than three months ago.

The release doesn't specify how many shares Berkshire bought in July, and Bending Spoons wouldn't confirm my math, but assuming Berkshire paid the $29 per share IPO price, that initial purchase would have been almost 20.7 million shares.

That puts Berkshire's holding now at close to 30.7 million shares, which would be worth more than $1.4 billion at Friday's close, a gain of 55.3% for its overall investment of $930 million.

watch now

Bending Spoon's release also says the "new investment brings Berkshire Hathaway's ownership to 4%."

The company told me in an email it hasn't "specifically disclosed" how many outstanding shares it has now, "but we had 635 million fully diluted weighted average shares outstanding in Q2, we issued 34 million shares as part of the IPO, and we will be issuing an additional 10 million as part of this transaction."

Using those numbers, Berkshire's presumed 30.7 million shares are a 4.5% stake, and that's what I've put in the Berkshire Portfolio Tracker for now.

We may learn more next month about exactly how many shares Berkshire bought in the IPO when its portfolio snapshot as of September 30 is due to be disclosed.

Another unknown: who at Berkshire made the call to take a stake in Bending Spoons.

watch now

Bending Spoons CEO and Co-Founder Luca Ferrari shares Wall Street's enthusiasm about Berkshire's investments, saying in the news release the Omaha company "has been among the finest and most respected capital allocators in the world, and is a longstanding inspiration for Bending Spoons."

Morningstar's Greggory Warren (who was one of the designated analyst questioners at Berkshire shareholders meetings from 2014 to 2019) writes the Bending Spoons buy, along with Berkshire's now $36 billion stake in Alphabet, show "the firm is finally moving out of its comfort zone to find places to put capital to work, which should be viewed as a positive for long-term investors."

At Barron's, Andrew Bary says, "Many Berkshire holders would like to see the company invest more heavily in stocks given the company's $350 billion-plus in cash, but Bending Spoons was a surprise" given its high valuation.

BUFFETT & BERKSHIRE AROUND THE INTERNETHIGHLIGHTS FROM CNBC'S BUFFETT ARCHIVE'I am one-quarter Coca-Cola' (2015)Warren Buffett defends Coca-Cola, a big and long-time Berkshire Hathaway holding, against health concerns over sugary beverages.

WARREN BUFFETT: Yeah well — people have been drinking Coca-Cola since 1886, so I imagine that there's been some — 

I don't know of any study that's been made on the lifetime of heavy users of Coca-Cola versus people who drink nothing but water.

But speaking for myself, I'm 84, literally one-quarter of all the calories I've consumed in the last 30 years have been Coca-Cola. And I don't see how anybody can feel any better than I feel. 

I am one-quarter Coca-Cola, and I can tell you, I haven't missed a day of work, you know — since I had the prostate cancer — radiation — three years ago. And I don't think the prostate cancer was caused (laughs) by Coca-Cola.

So — I — and all my friends drink it like crazy.

So there's 1.9 billion eight-ounce servings of Coca-Cola products sold around the world today, and there will be more than 1.9 billion a year from now, and more than that five years from now, and more than that ten years from now. 

And that's been true.  And some people will like other things, and — and if they like broccoli and Brussels sprouts, God bless them, you know, but don't invite me for dinner.  (Laughter)

BERKSHIRE STOCK WATCHFour weeks

Twelve months

BRK.A stock price: $798,000.00

BRK.B stock price: $532.02

BRK.B P/E (TTM): 13.38

Berkshire market capitalization: $1,138,885,966,355

Berkshire Cash as of June 30: $365.5 billion (Down 8.0% from March 31)

Excluding Rail Cash and Subtracting T-Bills Payable: $359.2 billion (Down 3.8% from March 31)

Berkshire repurchased $4.5 billion of its shares in Q2 2026.

BERKSHIRE'S TOP EQUITY HOLDINGS - Oct. 16, 2026Berkshire's top holdings of disclosed publicly traded stocks in the U.S. and Japan, by market value, based on the latest closing prices.

Holdings are as of June 30, 2026, as reported in Berkshire Hathaway's 13F filing on August 14, 2026, except for:

Mitsubishi, which is as of April 30, 2026The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.

QUESTIONS OR COMMENTSPlease send any questions or comments about the newsletter to me at [email protected]. (Sorry, but we don't forward questions or comments to Buffett himself.)

If you aren't already subscribed to this newsletter, you can sign up here.

Also, Buffett's annual letters to shareholders are highly recommended reading. There are collected here on Berkshire's website.

-- Alex Crippen, Editor, Warren Buffett Watch

Warren Buffett is universally regarded as one of the greatest investors of all time. The former Berkshire Hathaway (BRKA +0.80%) (BRKB +1.11%) CEO is heralded for his folksy quotes and investment wisdom, but when you get right down to the numbers, they show his sustained greatness.

He retired as CEO at the end of 2025, and for the previous 60 years at the helm of Berkshire Hathaway, his portfolio averaged a ridiculous 19.7% compounded annual gain. A 20% average annual return is great for five years or 10 years, but 50 years? That's just elite.

Over the same 60-year period, the S&P 500 has had a compound annual return of roughly half that -- 10.5%. And the Nasdaq Composite, which hasn't even been around that long, launching in 1971, has an 11.8% compound annual return since 1971.

That's a tough act to follow, which Buffett's successor, Greg Abel, acknowledged in the 2025 annual report, calling Buffett "arguably the greatest investor of all time."

Image source: Getty Images.

Abel hands
Berkshire Hathaway has arguably been the most reliable stock to own throughout the Buffett era. Investors grew to trust Buffett, and that trust was rewarded year after year with stellar returns.

Should investors expect the same type of performance from the company over the next 60 years? No, they probably shouldn't. That's a ridiculously high bar to expect the stock to clear over the long term. But that doesn't mean you shouldn't invest in Berkshire Hathaway stock. In fact, it remains one of my favorite stocks.

Abel and company don't need to average 20% returns each year over the next 20, 40 or 60 years to be an attractive buy. They do need to outperform the S&P 500 over time, which I'm confident they will. That's because the company that Buffett set up is built for long-term success.

From the companies it owns to the stocks in its portfolio, Berkshire Hathaway is invested in properties that are designed for long-term performance. They are well-run, efficient market leaders in essential, diverse industries. They are also great values. This creates a portfolio built to navigate various market cycles.

And that makes Berkshire Hathaway a stock that typically shows its strength during downturns, outperforming the market whether it is up or down.

BRKB Berkshire Hathaway$531.53+$5.85 (+1.11%)

NYSE · As of 3:49 PM ET 10/16/26

Framework intact
Abel has already left his mark on the portfolio, making several key changes. He also has a huge cash pile to steer the portfolio where it needs to go. Investors should trust that Abel will continue the stewardship of Berkshire Hathaway, as he has been steeped in its culture and has learned from Buffett since he arrived in the early 1990s. As Abel wrote in the shareholder letter:

Berkshire's culture and values form the basis of our operating framework, which shapes the strategy we pursue and the choices we make as we build Berkshire. As CEO, the framework governs how I lead every day. Our owners' time horizon extends beyond the tenure of any individual CEO. I will not be your CEO for the next 60 years as simple arithmetic makes that -- shall we say -- an ambitious plan. However, 20 years from now, when I will have just a fraction of the tenure that Warren had, my intention is that you -- or your descendants -- will be proud that your company is even stronger.

The portfolio may shift and the returns might not be quite as high, but Berkshire Hathaway should remain a must-own stock for a long time.

Berkshire Hathaway (BRKA +1.18%) (BRKB +1.11%) hasn't given investors much to get excited about this year. While the S&P 500 (^GSPC -1.11%) has gained about 14% in 2026, shares of Warren Buffett's former company are up only 3%.

But there's an interesting argument for owning Berkshire Hathaway that has nothing to do with how the stock is performing today. In fact, it becomes particularly compelling when the rest of the stock market is struggling.

Consider this: Since 1965, Berkshire Hathaway has outperformed the S&P 500 in 11 of the 13 years when the benchmark index posted a negative annual return.

That's an outstanding record -- and one that investors might want to consider before dismissing Berkshire as a stock that's lost its momentum.

Image source: Getty Images.

Berkshire Hathaway has a history of beating during down markets
One of the most interesting features of Berkshire Hathaway's annual shareholder letter is a table comparing the company's stock performance against the S&P 500, including dividends, dating back to 1965.

The results are remarkable. During that period, Berkshire delivered a compounded annual gain of 19.7%, compared to 10.5% for the S&P 500. That's the kind of performance that made Buffett one of the greatest investors of all time.

But I was particularly interested in what happened during the years when the stock market declined. The S&P 500 recorded 13 losing years between 1965 and 2025. Berkshire outperformed the index in 11 of them, including several occasions when its stock actually gained value while the broader market declined.

Years the S&P 500 Posted a Loss Since 1965

Berkshire Hathaway Performance

S&P 500 Performance

1966

-3.4%

-11.7%

1969

19.4%

-8.4%

1973

-2.5%

-14.8%

1974

-48.7%

-26.4%

1977

46.8%

-7.4%

1981

31.8%

-5%

1990

-23.1%

-3.1%

2000

26.6%

-9.1%

2001

6.5%

-11.9%

2002

-3.8%

-22.1%

2008

-31.8%

-37%

2018

2.8%

-4.4%

2022

4%

-18.1%

Source: Berkshire Hathaway. 

For example, in 2022, the S&P 500 fell 18.1% as inflation and rising interest rates weighed on stocks. Berkshire managed a 4% gain. And during the 2008 financial crisis, the S&P 500 plunged 37%. Berkshire had a bad year as well, falling 31.8%, but shareholders still came out ahead of investors holding the broader index.

The exceptions were 1974 and 1990, when Berkshire suffered steeper losses than the S&P 500. In 1974, Berkshire plunged 48.7%, compared to a 26.4% decline for the index.

So, Berkshire isn't necessarily a haven when stocks fall. But its history suggests it has frequently provided investors with some protection against the worst of a market decline.

Today's Change

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Current Price

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526.35

Why Berkshire Hathaway is different
There's a reason Berkshire has held up relatively well in difficult markets. It's not a typical stock, and its business isn't dependent on any single industry.

Berkshire owns companies ranging from the insurance giant GEICO to the BNSF railroad, as well as energy utilities, manufacturing operations, and retail businesses. It also has an investment portfolio that includes major holdings in Apple, American Express, and Coca-Cola.

That diversification doesn't eliminate risk, but it gives Berkshire multiple sources of earnings and cash flow, even when some parts of the economy are struggling.

Then there's the company's enormous cash position. In the company's second-quarter earnings report, Berkshire reported about $365.5 billion in cash and U.S. Treasury securities. Although some of that money is needed to support the insurance business, it also enables Berkshire to invest when attractive opportunities arise.

That's an important distinction. When stock prices fall, companies that need financing can find themselves in trouble. Berkshire, meanwhile, has the financial resources to purchase businesses or stocks at prices that may be considerably more attractive than they were during a bull market.

It's a strategy Buffett used for decades, and new Chief Executive Officer Greg Abel has emphasized that Berkshire will remain disciplined in how it invests shareholders' money.

Is Berkshire Hathaway stock a buy today?
Berkshire's lackluster performance in 2026 presents an interesting choice for investors.

The S&P 500 has continued climbing, while Berkshire has largely been on the sidelines. For investors seeking exposure to the market's fastest-growing companies, Berkshire may not look particularly appealing.

BRK.B data by YCharts

But Berkshire doesn't need a market decline to be a successful investment. Its collection of operating businesses, investment portfolio, and enormous financial resources can generate value over time, regardless of what the S&P 500 does in any particular year.

Still, with the S&P 500 enjoying another strong year and Berkshire stock taking a breather, investors have an opportunity to consider a company with a remarkable history of holding its own when markets struggle.

Berkshire may not be the stock that leads the market higher. But during the past six decades, it has frequently been the stock investors were glad they owned when the market headed lower.

Greg Abel did not have an easy task when he was named the new CEO of Berkshire Hathaway (BRKA +0.40%)(BRKB +0.38%). Not only is Berkshire an incredibly large company to run, but Abel was stepping into the shoes left by none other than Warren Buffett.

Buffett previously ran Berkshire for six decades, transforming the company from a struggling textile manufacturer into one of the world's largest conglomerates. Buffett is also viewed as one of, if not the greatest, investors of all time, having generated terrific returns for Berkshire's massive $350 billion equities portfolio and the stock.

After nine months on the job, Abel has begun to make his mark, including on the equities portfolio. Let's take a look at what changes he's making, and which stocks are in and which are out.

Berkshire Hathaway CEO Greg Abel. Image source: Getty Images.

What stocks will be Abel's core, long-term holdings?
In his first letter to shareholders earlier this year, Abel began to lay out his vision for how he plans to run the company, including the stock portfolio. Interestingly, Abel listed four stocks he views as "core" to the company, and that will likely see "limited activity" moving forward, barring any changes to these companies' fundamental theses.

The four listed were Apple (Berkshire's largest holding), American Express, Coca-Cola, and Moody's. Abel also views the company's investments in Japan's five largest trading houses in a similar light.

But also interesting were the names Abel did not mention. He didn't mention Bank of America, which consumed over 7% of the portfolio at the end of the second quarter. In fact, Berkshire slightly trimmed its stake in Bank of America in the second quarter.

Abel also didn't mention Berkshire's large holdings in U.S. oil companies, including Chevron, which accounts for over 5% of the portfolio, and Occidental Petroleum, which accounts for 4.5%. Berkshire also owns 26.5% of Occidental's outstanding shares.

Berkshire has acquired several energy assets in recent years, and with Abel having run Berkshire Hathaway Energy, I thought there was a chance these two names would be long-term holdings. They still could be, but oil is very volatile, so perhaps Abel is not willing to commit just yet.

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It also looks like Alphabet has become a core position. Buffett initiated a position in Google's parent company last year, but under Abel's leadership, Berkshire has plowed tens of billions into the stock, which now accounts for 10.6% of the portfolio.

Alphabet is really the first artificial intelligence hyperscaler Berkshire has gone big on.

Other minor moves
Berkshire has made some other minor moves in the portfolio under Abel.

Berkshire initiated its stake in Delta, which now accounts for 1.3% of the portfolio. Following the pandemic, Buffett dumped all of Berkshire's airline positions, noting the industry had fundamentally changed. However, the airlines had been making strides in recent years due to pent-up demand and a greater reliance on add-ons, such as extra legroom. The Iran war has put a bit of a dent in the airlines because jet fuel is now so much higher, but the core thesis persists.

Berkshire has also increased its exposure to the housing sector by increasing its stake in stocks such as the major homebuilder and real estate company Lennar this year. High mortgage rates have crushed the housing sector in recent years. In the long term, this could be a good time to come in and play contrarian. Housing could bounce back if inflation slows and interest rates come down. It could also be intriguing down the line if the country finds ways to increase inventory, a move that seems to be desired by the broader public.

Finally, Abel has resumed share repurchases of Berkshire stock after the company had essentially been on pause in recent years. Now, some of this could be due to Berkshire sitting on hundreds of billions in cash.

While the market may have afforded Buffett that latitude, Abel may not receive the same luxury. After all, investors want to see at least some of that cash put to work. I think capital returns will need to be more prevalent under Abel's leadership.

Bank of America is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, American Express, Apple, Berkshire Hathaway, Chevron, Lennar, and Moody's. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.

Berkshire Hathaway just spent nearly $200 million buying into a homebuilder whose CEO admits conditions have deteriorated, margins are shrinking, and almost half of visitors can't qualify for a mortgage. What does Warren Buffett's successor see that the market clearly…

On Oct. 1 and 2, as mortgage rates rose toward a three-year high, Berkshire Hathaway (NYSE:BRK-A | BRK-A Price Prediction)(NYSE:BRK-B) bought roughly 2.42 million more shares of Lennar (NYSE:LEN) for about $193 million, according to a Form 4 filed with the Securities and Exchange Commission. Berkshire now holds about 29 million Class A and Class B shares, a stake of roughly 12% worth about $2.2 billion.

Days later, Freddie Mac put the average 30-year fixed mortgage rate at 7.40%, its highest since November 2023 and the seventh straight weekly increase. Lennar closed Friday at $76.68, down 33.23% over the past year, after Barron’s flagged its worst drop since 2024. Short-seller Hunterbrook has also published a critical report on Lennar’s transactions with Millrose Properties (NYSE:MRP).

Berkshire hasn’t explained the purchase. My read: it is buying a homebuilder engineered to survive a long slump, at a price that already assumes one (we sorted Berkshire’s holdings by valuation and pulled the cheapest dividend payers into a free report).

America’s Biggest Builder Is Bleeding Margin Lennar’s third quarter was rough. Revenue fell 8.5% to $8.05 billion, and adjusted EPS of $1.23 missed the $1.30 consensus. Net income dropped 51.96%. Gross margin on home sales slipped to 15.8% from 17.5% a year earlier, even with incentives near 12% of price. Management cut full-year deliveries to 80,000 to 81,000 homes.

Stuart Miller, Lennar’s chief executive, said conditions had “deteriorated since our last earnings call.” The buyer’s math explains why. The 10-year Treasury yield hit 5.22% this week, and consumer sentiment came in at 51.7. In many Lennar markets, “almost 50% of our visitors cannot immediately qualify.”

Why Lennar Owns Almost None of Its Land Land is what bankrupted builders in 2008. They bought lots at peak prices, then wrote them down when demand collapsed. Lennar owns roughly 2% of its homesites and controls about 476,000 through third parties, mainly land bankers such as Millrose. Homebuilding debt is just 16.6% of total capital.

That turns Lennar into something closer to a manufacturer. Build time fell to a record 116 days, and construction costs are down 14% since late 2023. Miller says the entire margin gap comes from land contracted under older, costlier assumptions. Accepting thin margins, he argued, “we are buying volume” and “buying time,” working through a land challenge that is “finite” and “visible.”

The weak spot is the same structure. Land-light still costs money: option fees are rising as land-bank holding periods stretch, and deposits and pre-acquisition costs have reached $7.3 billion. That is exactly where Hunterbrook aimed its criticism.

Signals That Will Test Berkshire’s Conviction Lennar guided fourth-quarter gross margin to 15.5% to 16.0%, with 19,500 to 20,500 new orders. That outlook assumed mortgage rates near 6.8%. Rates are now well above that.

Keep an eye on three numbers in the next earnings report. If orders land inside guidance with rates above 7%, the volume machine is doing its job. If margin slips below 15.5%, it means rates are hitting faster than Lennar can work off old land. And if deposits keep rising while land-bank purchases are paused, the off-balance-sheet risk is getting bigger instead of contracting.

Berkshire’s money tells you a patient investor likes the design. It does not tell you the housing market has hit bottom. For the families who can’t qualify today, the trigger is the same one Lennar needs: lower rates.

Contact [email protected] for any questions or corrections.

Key Takeaways Berkshire Hathaway's float reached about $177.5B by June 30, 2026, expanding its investment capacity.Profitable underwriting keeps float costs low, supporting investments and acquisitions that can add returns.Float reduces Berkshire Hathaway's reliance on shareholder capital or external borrowing to fund expansion. Berkshire Hathaway’s (BRK.B - Free Report) success is often linked to former CEO Warren Buffett’s ability to identify high-quality businesses at attractive prices. Equally important, however, has been the company’s use of insurance “float” as a powerful source of investment capital.

Insurance float represents premiums collected before related claims are paid. Berkshire receives cash upfront from policyholders, while claims may not be settled for months or even years. During that period, the company can invest the assets backing those future obligations across stocks, bonds and operating businesses. Importantly, float is not permanent capital, as Berkshire remains responsible for meeting policyholder claims when they arise.

This model becomes valuable when combined with disciplined underwriting. Profitable insurance operations generate float at a low cost, allowing Berkshire to deploy substantial capital into investments and acquisitions that can produce additional returns.

Berkshire’s float increased to about $177.5 billion as of June 30, 2026, from roughly $114 billion at the end of 2017, significantly expanding its investment capacity. This source of funding reduces the company’s dependence on shareholder capital or external borrowing while supporting continued expansion across its diversified businesses.

Insurance float is therefore far more than just an accounting concept. It is a structural funding advantage that has helped Berkshire compound capital over decades and become one of the world’s most formidable capital-allocation businesses.

What About BRK.B’s Peers?Chubb Limited (CB - Free Report) and The Travelers Companies (TRV - Free Report) are two other notable companies in the insurance space.

Chubb Limited’s disciplined approach to capital deployment emphasizes strong underwriting, prudent reserve practices and selective acquisitions to broaden its global presence and enhance specialty capabilities. Chubb also prioritizes long-term value creation through consistent shareholder returns via dividends and buybacks, while investing in technology and risk management to drive sustainable growth.

The Travelers Companies deploys capital prudently by focusing on disciplined underwriting, accurate risk assessment and data-informed pricing, ensuring stable profitability and financial resilience. Travelers drives long-term value through continued investments in technology and analytics, while consistently returning excess capital to shareholders via dividends and share buybacks.

BRK.B’s Price PerformanceShares of BRK.B have gained 0.4% year to date, outperforming the industry.

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BRK.B’s Expensive ValuationBRK.B trades at a price-to-book value ratio of 1.44, above the industry average of 1.38. 

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Estimates for BRK.BThe Zacks Consensus Estimate for BRK.B’s third-quarter and fourth-quarter 2026 EPS has witnessed no movement over the past 30 days. The same holds true for 2026 and 2027.

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In his first letter to shareholders as the CEO of Berkshire Hathaway (BRKA +0.07%) (BRKB +0.25%), Greg Abel made his position clear on whether Berkshire Hathaway would offer a dividend any time soon. His position was no different than his predecessor, Warren Buffett.

"Our approach to cash dividends continues to be that Berkshire will not pay dividends so long as more than one dollar of market value for shareholders is reasonably likely to be created by each dollar of retained earnings," Abel wrote in the shareholder letter back in late February.

While Abel and Berkshire don't pay out a dividend, they certainly like stocks that do. Of the 29 stocks currently in Berkshire Hathaway's $299 billion portfolio, 26 of them pay dividends. Of those 26 dividend stocks, here is the one I'd buy first.

Image source: Getty Images.

Constellation Brands Berkshire holds some excellent dividend stocks, namely Coca-Cola, Kroger, Chevron, and American Express, but if I had to pick one, it would be Constellation Brands (STX +4.37%). It is one of the largest beer importers and marketers in the U.S. and it sells two of the most popular brands, Corona and Modelo. It also sells wine and spirits, but beer makes up more than 90% of its revenue.

It has faced declining revenue in recent years due to demographic shifts with younger generations consuming less alcohol, tariffs raising packaging prices, inflation, and a pullback among Hispanics, who account for about 50% of beer sales. Last year on an earnings call with analysts, CEO Bill Newlands said that the Trump Administration's hardline immigration policies were causing less consumption among Hispanics due to various factors, including a drop in social gatherings. This has led to a slowdown in revenue and has challenged earnings.

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But while revenue was down 3% in the most recent quarter, adjusted earnings were up about 7% year-over-year to $3.43 per share. Constellation has been able to boost its profitability by divesting some of its lower margin, lower selling wine and spirits businesses and reinvesting in its higher margin beer business. That has improved the bottom line and increased its cash position.

High-yield dividend In the most recent quarter, Constellation reported an operating cash flow increase of 4% year-over-year to $662 million while free cash flow jumped 9% to $485 million. That should help it remain committed to its dividend, which it has increased for 10 straight years.

It currently pays out a quarterly dividend of $1.03 per share at a high yield of 3.64%. Further, it has a low payout ratio of 34%, so it should be able to easily sustain its dividend.

In addition to its strong dividend, the stock is pretty cheap, trading at just 11 times earnings. It is currently down 19% year to date and is trading at a 52-week low of $113 per share. But Wall Street is bullish on this beaten down stock as 62% of analysts rate it as a buy with a median price target of $173.50 per share. That would suggest a 12-month return of 54%.

So, in addition to the safe and sustainable dividend, there could be some significant upside for the share price, considering its cheap valuation.

American Express is an advertising partner of Motley Fool Money. Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends American Express, Berkshire Hathaway, and Chevron. The Motley Fool recommends Kroger. The Motley Fool has a disclosure policy.

Key Takeaways Berkshire Hathaway closed at $505.48, nearly 6% below its 52-week high of $537.74.Berkshire Hathaway holds over $370B in cash and U.S. Treasuries, supporting acquisitions and investments.Berkshire Hathaway's 2026 and 2027 consensus estimates rose 3.8% and 2% over the past 60 days. Shares of Berkshire Hathaway Inc. (BRK.B - Free Report) closed at $505.48 on Friday, a nearly 6% discount to its 52-week high of $537.74.

BRK.B stock has gained 1.2% year to date compared with the industry’s 0.9% growth, the Finance sector’s 6.3% decrease and the Zacks S&P 500 composite's gain of 17.1% in the same time frame.

Berkshire Hathaway is a conglomerate with more than 90 subsidiaries engaged in diverse business activities. This provides it with stability in various economic cycles.

BRK.B vs Industry, Sector, S&P 500 YTD
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BRK.B’s peer, Chubb Limited (CB - Free Report) , has gained 5.9% year to date, while another peer, The Progressive Corporation (PGR - Free Report) , has lost 8.6% in the same time frame.

BRK.B is ExpensiveShares of Berkshire Hathaway are overvalued compared with its industry. The stock is currently trading at a price-to-book multiple of 1.44, higher than the industry average of 1.41 but below the three-year median of 1.53.  
 

Image Source: Zacks Investment Research

A premium valuation reflects a strong balance sheet, substantial insurance float, diversified earnings and proven capital allocation. Its high-quality businesses and resilience across economic cycles attract a quality premium.

It has a Value Score of D. Berkshire Hathaway is relatively cheap compared with PGR, but expensive compared with CB.

The Case for BRK.B StockBerkshire Hathaway is a highly diversified conglomerate with more than 90 businesses spanning insurance, energy, railroads, manufacturing, retail and consumer products. This broad operating footprint limits dependence on any single industry and enhances earnings stability across economic cycles.

Insurance remains Berkshire Hathaway’s largest business, contributing roughly one-fourth of total revenues. Disciplined underwriting, steady premium growth and favorable pricing support segment performance. More importantly, Berkshire Hathaway’s sizable insurance float—premiums collected before claims are paid—provides a low-cost source of capital that can be deployed across investments and acquisitions. This structural advantage strengthens the company’s capital-allocation flexibility and supports long-term value creation.

Berkshire Hathaway is also reshaping its investment portfolio to enhance income stability and geographic diversification. The company has increased its exposure to Japanese trading houses and airline-related businesses while reducing selected payment-company holdings. Its planned $6.8 billion acquisition of Taylor Morrison Home Corp. further expands its exposure to the U.S. housing market and reflects confidence in the sector’s long-term fundamentals.

Financial strength remains a key advantage. With more than $370 billion in cash and U.S. Treasury holdings, conservative leverage and a strong balance sheet, Berkshire Hathaway has substantial capacity to pursue acquisitions, make opportunistic investments and withstand periods of economic volatility.

Additionally, Berkshire Hathaway’s return on equity of 6.6% remains above the industry average, highlighting its relatively efficient use of shareholder capital.

Optimistic Analyst SentimentThe Zacks Consensus Estimate for 2026 and 2027 revenues indicates a 5.6% and 4.5% year-over-year increase, respectively. The same for 2026 and 2027 earnings implies a 5.1% and 1.9% year-over-year increase, respectively. The expected long-term earnings growth is pegged at 12%, better than the industry average of 7.9%.
 

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The consensus estimate for 2026 and 2027 earnings has moved 3.8% and 2% north, respectively, in the last 60 days.
The same for CB too moved up in the last 60 days.

However, for PGR, 2026 estimates moved north while 2027 estimates moved south in the past 60 days.

Parting Thoughts on BRK.B SharesBerkshire Hathaway has been a cornerstone of investor portfolios for decades, generating steady shareholder value under Warren Buffett’s nearly 60-year leadership. The spotlight has now shifted to the next chapter, with Greg Abel becoming CEO on Jan. 1, 2026, and Buffett leaving leadership of the behemoth altogether and remaining chairman emeritus.

Stocks like Berkshire Hathaway warrant a premium. Price appreciation, optimistic analysts' sentiments and growth estimates instill confidence in the stock. Investors can add this Zacks Rank #2 (Buy) stock to the portfolio to have a feeling of dynamism by holding a single stock like BRK.B.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

(This is the Warren Buffett Watch newsletter, news and analysis on all things Warren Buffett and Berkshire Hathaway. You can sign up here to receive it every Friday evening in your inbox.)

Berkshire reveals nearly doubled stake in slumping homebuilderBerkshire Hathaway has increased its bet on a long-term recovery for the struggling U.S. housing market by nearly doubling its stake in Lennar, the nation's second largest homebuilder, since the beginning of July.

As of late Friday, Berkshire reports owning almost 25.4 million shares of LEN and another 549 thousand of its Class B super-voting shares for a total of 25.9 million shares, currently valued at $2.1 billion.

That's 10.9% of Lennar's roughly 238 million shares outstanding for both classes.

And it's a 93% increase from the 13.4 million shares Berkshire owned as of June 30, according to the company's mid-August SEC 13F portfolio snapshot filing for its second quarter.

Despite the big increase, it's still a medium-to-small sized position by Berkshire standards and is likely the work of portfolio manager Ted Weschler.

For most of the stocks in its portfolio, we will have to wait until mid-November for the next 13F to find out whether Berkshire was buying or selling during its third quarter ending this coming Wednesday.

In this case, however, Berkshire had to quickly disclose its stake had hit 10% on September 21 under an SEC rule that defines any holder at or above that trigger as an "insider" potentially able to "change or influence company management and policies."

The rule also requires that any additional transactions must be disclosed within two business days.

On Monday, Berkshire reported buying Lennar shares worth $212.4 million between September 17 and September 21. 

Another filing after Friday's closing bell disclosed an additional $136.4 million of purchases Wednesday, Thursday, and Friday.

LEN YTD chart

Lennar's stock price was up as much as 6.8% in Tuesday's trading after the first filing the night before and held much of it for a four-day gain of 5.2%.

Berkshire's Q3 buying came as the stock fell 9.2% through Friday's close. It's down 20.1% so far this year.

Last week, Lennar's quarterly earnings came in below Wall Street's forecast and revenue fell 8%.

Its forecast for the current quarter was also disappointing, with the CEO telling analysts houses are less affordable and there are fewer qualified buyers with 30-year mortgages hitting 7%.

CNBC.com quotes CFRA Research analyst Cathy Seifert as saying it's a "classic Berkshire value play."

She points out Berkshire has a "pretty significant presence" in housing following CEO Greg Abel's $6.8 billion acquisition of Taylor Morrison Home, announced in June. He plans to combine its operations with Berkshire's Clayton Homes.

Earlier this month, Abel said in a CNBC interview that while he does not see "any type of immediate recovery" for U.S. homebuilders, he expects Taylor Morrison will be a "very strong asset" five to 10 years from now because the "American dream will continue to exist."

The company's other housing and home improvement subsidiaries include Shaw Industries, Johns Manville, and Benjamin Moore. 

At Barron's, Andrew Bary suggests Berkshire "probably would like to buy all of Lennar," and could afford it at a cost of approximately $25 billion, but may be coming up against Chairman and CEO Stuart Miller's 70% ownership of the company's controlling Class B shares.

"One issue could be that the Millers think Lennar stock is undervalued-trading for less than half its 2024 high of almost $200 and below book value-and aren't interested in selling even at a premium to the currently depressed price."

GEICO joining Macy's Thanksgiving Day parade for first timeBefore the parade, the Gecko will headline a 10-week promotional tour from San Francisco to New York, stopping in 12 cities.

BUFFETT & BERKSHIRE AROUND THE INTERNETSome links may require a subscription:

Associated Press: Even as trading and markets moved faster, Warren Buffett made patience profitable and coolThe Wall Street Journal on MSN: Why Warren Buffett's son Howie, Berkshire's new chairman, is also its guardianBloomberg Opinion (subscription): Howard Buffett Is the Right Kind of Nepo Baby The Wall Street Journal Markets A.M. Newsletter: You Can't Be Like Warren Buffett—Not Even He Could AgainCBS News video (via WBBM Chicago): Some investment lessons from Warren BuffetBNN Bloomberg video: Berkshire Hathaway will 'be able to do things in the future that we just don't foresee yet': SneddonYahoo Finance video: Warren Buffett will go down as the 'greatest investor of all time'Barron's on MSN: Warren Buffett hates bonds—and Berkshire's portfolio is loving him right nowMorningstar: It's No Wonder Berkshire Hathaway Piled Into Alphabet Stock This YearWMTW-TV (Portland, ME): How Warren Buffett's 'worst deal' became a historic win for the state of MaineBenzinga: No Warren Buffett, No Problem: Former Hedge Funder Says Berkshire Stock 'Likely to Beat the S&P 500 Over the Next Five Years'The Age (Australia): Warren Buffett just took a big risk with the $1.5 trillion [AU$] giant he builtSierra Club: Sierra Club's Utility Report Card Shows MidAmerican and IPL Failing to Reduce PollutionBERKSHIRE STOCK WATCHTwelve months

BRK.B vs SPX 1 year

BRK.A stock price: $758,505.68

BRK.B stock price: $505.48

BRK.B P/E (TTM): 12.71

Berkshire market capitalization: $1,082,225,722,347

Berkshire Cash as of June 30: $365.5 billion (Down 8.0% from March 31)

Excluding Rail Cash and Subtracting T-Bills Payable: $359.2 billion (Down 3.8% from March 31)

Berkshire repurchased $4.5 billion of its shares in Q2 2026.

BERKSHIRE'S TOP EQUITY HOLDINGS - Sep. 25, 2026Berkshire's top holdings of disclosed publicly traded stocks in the U.S. and Japan, by market value, based on the latest closing prices.

Holdings are as of June 30, 2026, as reported in Berkshire Hathaway's 13F filing on August 14, 2026, except for:

Mitsubishi, which is as of April 30, 2026The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.

QUESTIONS OR COMMENTSPlease send any questions or comments about the newsletter to me at [email protected]. (Sorry, but we don't forward questions or comments to Buffett himself.)

If you aren't already subscribed to this newsletter, you can sign up here.

Also, Buffett's annual letters to shareholders are highly recommended reading. There are collected here on Berkshire's website.

-- Alex Crippen, Editor, Warren Buffett Watch

SummaryBerkshire Hathaway is rated a strong buy as it transitions under Greg Abel, focusing on infrastructure, AI, and housing vertical integration.BRK.B is leveraging its $365.5B cash and $177.5B insurance float to forge equity-for-energy deals with hyperscalers, creating a high-margin AI infrastructure vertical.Strategic acquisitions in housing and Japanese trading houses, plus innovative capital deployment, position BRK.B for superior returns in a 5% yield environment.Key risks include GEICO's deteriorating combined ratio, wildfire litigation at BHE, and potential margin compression from regulatory and interest rate shifts. Brycia James/iStock Unreleased via Getty Images

In my last coverage, I upgraded Berkshire Hathaway (BRK.B) (BRK.A) stock to a strong buy, based on the argument that Wall Street is not considering its business evolution under new

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Berkshire Hathaway (BRKA +0.27%)(BRKB +0.42%) had about $365.5 billion in cash and short-term Treasury securities at the end of June.

To be sure, this has been investors' largest criticism of Berkshire over the past few years, and for good reason. After all, it would certainly be preferable to deploy that money in stocks or acquisitions that produce double-digit annualized returns. But it's also important to know that Berkshire's cash isn't just sitting in a warehouse. It's invested in interest-earning instruments. And it's an asset that gets more valuable as rates rise.

Image source: Getty Images.

The Federal Reserve just raised interest rates for the first time in three years, and a closer look shows the position of strength Berkshire Hathaway is in as we head into a rate-hike cycle amid economic uncertainty.

How much does Berkshire's cash earn?I'll spare you the calculations from Berkshire's balance sheet, but based on the 3-month T-bill yield as of this writing (4.08%), Berkshire's $365.5 billion cash stockpile can be expected to generate about $14.9 billion of interest income on an annualized basis. Even assuming a 21% federal income tax rate, this is about $11.8 billion in after-tax income.

For context, Berkshire's operating profit is about $52 billion (annualized) based on its second quarter results. This means that Berkshire's cash could be responsible for more than one-fifth of its operating earnings.

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Here's one important point. Since it is invested in short-dated T-bills and other short-term instruments, the yield from Berkshire's cash tends to track the federal funds rate. It's not a perfect correlation, but if the Fed raises rates by 0.25%, you can expect the yield from Berkshire's cash to rise by about the same percentage.

This means that a standard, quarter-point rate hike is worth about $900 million per year in additional interest income for Berkshire. It isn't immediate, as Berkshire's T-bills are rolled over as they expire, but the point is that a Fed rate hike gives Berkshire a significant raise.

Berkshire's cash is there for a reasonLet's be clear. Berkshire is holding $365.5 billion in cash to buy assets. That's the ultimate goal. If CEO Greg Abel found an extremely attractive opportunity to make a $200 billion acquisition tomorrow, he certainly wouldn't pass on the opportunity because it meant less income from Treasuries.

Having said that, Berkshire's cash stockpile is an incredible asset at the start of a rate hike cycle for two reasons. It gives the company unparalleled financial flexibility to pounce on opportunities in an uncertain economy and provides a steady stream of risk-free income while management waits for the opportunities it wants. And the income stream just got a little more valuable.

Warren Buffett gained control of Berkshire Hathaway (BRKA +0.63%) (BRKB +0.67%) in 1965 and ran it as his main investment vehicle until his retirement in 2025. During his 60-year tenure as CEO, Berkshire's shares gained in value by an average of 19.9% annually, an incredible compounding track record.

But during this time frame, Berkshire Hathaway has paid a dividend just once: a $0.10-per-share cash distribution in 1967. The holding company's reluctance to pay out dividends is key to its success story. Although Berkshire, particularly in more recent years, has repurchased its own shares, since Buffett's 1965 takeover, its focus has been on reinvesting its earnings and investment gains into new investments and acquisitions.

While Greg Abel took over as CEO in January 2026, ushering in a new era for Berkshire, don't assume these capital priorities are about to change.

Image source: The Motley Fool.

Not paying dividends is part and parcel of Berkshire's success As Abel noted in his first letter to Berkshire Hathaway shareholders, "Our approach to cash dividends continues to be that Berkshire will not pay dividends so long as more than a dollar of market value for shareholders is reasonably likely to be created by each dollar of retained earnings."

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In other words, Berkshire Hathaway appears to remain dedicated to Buffett's approach, the very approach that turned this former textile company into one of the world's largest conglomerates. So far this year, Abel has demonstrated that Berkshire is still in the business of deploying its capital into new acquisitions and investments.

For instance, on July 24, Berkshire Hathaway completed its $8.5 billion acquisition of homebuilder Taylor Morrison. Also, this year, under Abel's leadership, the company has increased its equity stake in Alphabet. During Q2, Berkshire increased its position by $17 billion, $10 billion of which came from its private placement investment in newly issued Alphabet shares.

Share repurchases remain a secondary option Only time will tell whether these Abel-led acquisitions and investments will perform as well as, if not better than, the Warren Buffett investments in the Berkshire portfolio. While reinvesting cash flow and capital into new investments remains Berkshire Hathaway's main focus, that's not its only use for excess capital.

Secondary to Berkshire's confidence in its ability to reinvest its capital, the company has also historically shunned issuing dividends due to their tax inefficiency. Cash dividends are taxable, but share buybacks, which achieve the same objective of returning capital to investors, are only taxable to those who sell their shares.

Abel has resumed buybacks since taking the helm. Berkshire maintains the same buyback policy as before, opting to only repurchase shares when it's "conservatively determined" by management that the stock trades below intrinsic value. Berkshire bought back just $235 million in shares during Q1 2026, but since April has accelerated repurchases, buying back $4.5 billion in Q2 and an additional $3.5 billion since then.

Based on recent activity, Abel appears to be balancing between new investments and repurchases. While not certain, this approach may continue, especially since over $350 billion out of Berkshire's $1.26 trillion in total assets remain in cash and cash equivalents. Berkshire Hathaway may still not be one of the top dividend stocks, but Abel is arguably sticking to the approach that made it a successful long-term investment.

Berkshire Hathaway (BRKA -0.48%)(BRKB -0.41%) is off to a strong start in its first year under CEO Greg Abel. Second-quarter operating earnings rose 16% from a year earlier. The stock, near $505 as of this writing, puts the company's market value at about $1.1 trillion.

Whether the next five years look as good is a harder call. Over a stretch that long, the stock should mostly track two numbers -- how fast operating earnings grow, and what multiple of those earnings investors will pay.

And both numbers hinge, arguably more than anything else, on what Abel does with the company's $365 billion of cash and U.S. Treasury bills.

Image source: Getty Images.

Strong growth, and a price to matchOperating earnings are Berkshire's preferred yardstick. The measure leaves out the stock portfolio's gains and losses, which swing reported net income from quarter to quarter and which the company says are usually meaningless in any given period.

On that measure, the company earned about $13 billion during the second quarter. First-half operating earnings totaled $24.3 billion, 17% more than a year earlier.

The growth is a rebound, not a continuation. Operating earnings slipped 6% in 2025, to $44.5 billion, dragged down by weaker insurance results.

This year, growth is broad-based outside insurance. BNSF, the energy business, and the manufacturing, service and retailing group all grew first-half earnings between about 10% and 15% year over year.

Add up the past four reported quarters, and Berkshire has earned about $48 billion of operating earnings, or about $22 for every Class B share. Against a $505 share price, that comes to about 23 times operating earnings -- a premium price, in my view. Investors are paying today for growth that hasn't happened yet.

Greg Abel has started spending the cashBerkshire's cash and U.S. Treasury bills stood at about $365 billion at midyear, a little less than at the start of the year.

In January, the company closed its $9.4 billion purchase of the chemicals maker OxyChem. In late July, it paid about $6.8 billion in cash for homebuilder Taylor Morrison. And it repurchased about $4.5 billion of its own stock in the second quarter, after buying back almost none in the first. The buyback decision is Abel's now, made in consultation with chairman Warren Buffett.

Berkshire was a net buyer of stocks, too. The cost basis of Berkshire's equity portfolio rose about $21 billion during the first half.

Those uses of cash do different jobs for the five-year math. An acquisition adds operating earnings directly. Stock purchases mostly add just dividend income, since portfolio gains sit outside the operating measure. And buybacks shrink the share count, down about 0.5% through June, so each share gets a bigger piece of the earnings.

Meanwhile, the case for leaving the cash parked may get weaker. After all, Berkshire's insurance investment income fell about 8% in the first half, a decline the company attributed to lower short-term interest rates. The less Treasury bills pay, the more the five-year outcome depends on Abel finding better places for the money.

Where could the stock land?Assume growth settles at 5% a year, slower than 2026 but better than 2025, and that investors put a lower valuation multiple on a slower Berkshire -- say, 18 times operating earnings. Per-share operating earnings would reach about $29 by mid-2031, and the stock would sit near $525. Five years of almost nothing.

The upside case leans on the cash. If acquisitions and buybacks help operating earnings compound at 10% a year (a pace the company has beaten so far in 2026), and the stock keeps a valuation near 22 times operating earnings, per-share earnings reach about $37. The stock lands a little above $800, about a 10% annual return.

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The stock portfolio adds noise to every path. Berkshire's five largest holdings made up 66% of its $324 billion equity portfolio at midyear: Alphabet, American Express, Apple, Bank of America, and Coca-Cola. Of course, a rough stretch for even one or two of those positions could move what investors pay for the whole company. But the portfolio is only about 30% of Berkshire's market value, and its swings don't touch operating earnings at all.

Ultimately, I'd split the difference. Growth near 8% and a valuation of 20 times operating earnings would put the shares around $650 in five years, a mid-single-digit annual return, plus whatever Abel's dealmaking adds on top.

But here's what's interesting about this investment. The downside risk seems low given Berkshire's cash, and there are scenarios that could be far more bullish than we've outlined here if the company deploys its cash into the right assets at the right time. For that reason, I believe Berkshire is a great core holding, even if expectations for the stock are modest. I believe the stock offers meaningful upside potential with low downside risk.

(This is the Warren Buffett Watch newsletter, news and analysis on all things Warren Buffett and Berkshire Hathaway. You can sign up here to receive it every Friday evening in your inbox.)

Berkshire Hathaway CEO Greg Abel told CNBC the company is pursuing artificial intelligence opportunities on two paths.

In a live "Squawk Box" interview Wednesday morning, Abel said he sees providing energy to the growing number of AI data centers as a "significant opportunity for Berkshire and Berkshire Hathaway Energy" since he's long believed the biggest constraint for the buildout is having enough energy to operate the power-hungry facilities.

But, he said, the company will only sell energy to hyperscalers if there is "no impact to the rates of our other customers."

The other avenue is Berkshire's now almost $36 billion investment in shares of Google parent Alphabet that was initiated by Warren Buffett last year.

Abel said from the experience of Berkshire's own operating companies, he and Buffett knew AI was "going to have a significant impact on America and businesses," and "we saw Google as a significant player."

Abel did the interview from Japan, where he was visiting a Berkshire tool-making unit and meeting with executives of the "trading houses" in which Berkshire has significant equity stakes.

He said none of them mentioned rising Japanese interest rates as a "fundamental challenge right now."

And while Abel does not see "any type of immediate recovery" for U.S. homebuilders with a "bumpy road for a while," he expects Berkshire's newly acquired Taylor Morrison will be a "very strong asset" five to 10 years from now because the "American dream will continue to exist."

Abel acknowledged there is growing opposition in the country to the construction of new data centers for AI.

"There is a lot more pushback in the communities across the U.S."

He believes companies building data centers need to "seriously evaluate" the "reaction from communities," and address those concerns by using technologies that minimize water use, as one example.

Abel pointed out that in Iowa, where Berkshire has a substantial utility operation, data centers have provided "very, very substantial" tax relief for residents and provided revenues that support local services like schools, the police, and fire departments.

He argued a data center has to be a "welcomed member of the community."

In the interview, Abel described how Berkshire came to make a $10 billion purchase of Alphabet stock directly from the company this spring as Google's parent raised $80 billion to "fund investments in its world-class AI compute infrastructure to meet its unprecedented customer demand."

Noting that Buffett had initially purchased Alphabet shares for Berkshire's portfolio last year, Abel recounted he received a phone call on a Sunday morning in late May with an offer to participate in a large equity offering by Alphabet.

"They hadn't set the size but recommended that we consider 10 billion."

Abel replied he would "get back to them right away," and "very much consistent with how we manage Berkshire ... I called Warren and I said we had a significant opportunity to ... continue to invest in Google ... with a significant block." 

They agreed they were "comfortable" with a $10 billion purchase at a 6 1/2% discount "and then ultimately consummated the transaction."

Abel told Becky Quick that Berkshire Hathaway will continue to sell yen-denominated bonds as needed to make future investments in Japan, despite the nation's 10-year bond going just above 3% this week, its highest yield in 30 years.

He noted rates in Japan are "still relatively modest when you think about it." The U.S. 10-year yield is close to 4.8%.

Abel expects Berkshire will continue to hold its investments in Itochu Corp., Marubeni Corp., Mitsubishi Corp., Mitsui & Co., and Sumitomo Corp. "for many decades," saying he had "just exceptional discussions" with their managements.

"We've been building really strong relationships with each of the companies, and looking at other opportunities here in Japan, and for that matter, abroad."

Abel declined to comment on reports Berkshire might team with Tokio Marine on a major international acquisition.

In March, Berkshire paid $1.8 billion for a roughly 2.5% stake in the Japanese insurer and entered into a "long-term strategic relationship" to create "compelling" opportunities for both companies.

Abel did say the partnership is "very broad" and "there's no obligation to act on it."

"But if it were to make sense, both for Tokio Marine and for ourselves, of course, we'd love to pursue a transaction with them."

BECKY QUICK:  Welcome back, everybody.

Berkshire Hathaway first invested in Japan's five main "trading houses" just over six years ago, and it consistently increased its position. Berkshire now owns more than 10 percent of each of the top five. 

And the company's CEO, Greg Abel, is in Japan right now.

He joins us for a business update and what he's seeing there. And, Greg, it's great to see you. Thank you for joining us.

GREG ABEL:  Good morning, Becky. Great to be on "Squawk Box".

BECKY QUICK:  Good morning. Although I — I see it's evening there in Japan as we would anticipate.

Greg, let's talk a little bit about what you're doing there, why you're in Japan right now.

GREG ABEL:  Yeah. It really serves a couple of great purposes.

First of all, upon arriving, I was able to go visit Tungaloy. It's one of our operating units here based in Japan. It's part of IMC, a company that makes tool bits. So spent the afternoon up in Fukushima with our team there.

And it's really amazing story. We acquired it back in 2008. And over that period of time, really built a business from — from scratch.

It came out of Toshiba, but a relatively small company and three, so a number of significant plants up in Fukushima. So spent the day there touring it.

We have 15 hundred employees in Japan and really, just really unique.

Here's a company that has just under $240 million of sales in Japan and an incremental $400 million internationally.

So, very small group just doing remarkable things. And it's a — it's a great way to start a trip.

And then, obviously, been visiting with our — each of the five trading houses and Tokio Marine.

BECKY QUICK:  That purchase we first found out about six years ago, I think the purchase of those five trading houses that you all originally bought into.

At the time when we found out, I think it was around 5 percent that you owned of each of the trading houses.

You had made a deal with them, you and Warren Buffett, that you wouldn't buy more than 9.9 percent without their permission.

I think all of those houses have appreciated having Berkshire as a shareholder. You now own more than 10 percent in each of them.

A lot of that's been because those companies have been buying back shares, too.

But what — what is your long-term plan for these trading house positions? And what kind of partnership do you have with these companies?

GREG ABEL:  Yeah, you're absolutely right. It goes back to six years ago.

We actually announced it U.S. time. It was Warren's 90th birthday. And the next day it was announced in Tokyo and in Japan that we had acquired just over 5 percent.

And at that time, we communicated, it was really a long-term proposition, that we saw this as a long-term holding. And we looked forward at that moment to building a relationship with each of the five companies.

Three years later, we attended — were here in Tokyo — in 2023, and we met with each of the companies. And that was part of building the relationship because, one, we were very pleased with the underlying investment at that time.

At that point in time, our investment percentage had clicked over the 7 percent. And — and the businesses were performing well.

As you highlighted, they were purchased — really managing their capital well, purchasing shares back in, increasing their dividends, and their overall performance continued to improve.

And then, you're absolutely right. We — we highlighted and requested their approval that we — could we go over 10 percent?

Because up to that point, we'd always highlighted we would stay below 10 and only exceed it if the five management companies — or the five trading companies — agreed to us exceeding the 10 percent.

And then upon receiving their approval, we went above 10 percent.

And it's really, one, a long-term investment that we intend to hold for many decades.

And then, secondly, we've been building really strong relationships with each of the companies, and looking at other opportunities here in Japan, and for that matter, abroad.

And those are just exceptional discussions that each visit, we continue to build on the prior discussions and look at incremental opportunities.

BECKY QUICK:  And, Greg, I'll bring up the relationship with Tokio Marine and the percentage that you've bought into that.

There have been some reports recently suggesting that the Japanese insurer is on the look for a purchase, maybe even looking at Australia's Suncorp or Canada's IAG as a potential purchase acquisition.

These reports suggest that they would do this with Berkshire's balance sheet backing it up.

Can you tell us anything about what may be happening with some of those talks, and whether Berkshire would back, financially, those acquisitions, potentially?

GREG ABEL:  Yeah. The — we have a — right before our annual meeting, we announced the transaction with Tokio Marine.

And it's an exceptional opportunity because they are a great partner. And we were absolutely thrilled to be able to reach an agreement with them, where we have 2 1/2 percent of their quota share of their book, i.e., what they're underwriting. We have a 2 1/2 percent interest in the company.

And then we announced a strategic partnership.

But what I would highlight is that strategic partnership is very broad. And either of us can bring ideas back and forth to each other. There's no obligation to act on it.

But if it were to make sense, both for Tokio Marine and for ourselves, of course, we'd love to pursue a transaction with them.

And, as you would guess, we're not commenting on any of the specific companies you noted.

BECKY QUICK:  OK.

Greg, one of the things that you all did when you started making these moves into Japanese equities was to start issuing bonds in Japan, yen-denominated bonds.

And I think that's been a pretty profitable position for you all because of where interest rates have been with Japanese bonds.

We are talking this morning about how the Japanese 10-year bond has now yield — is now yielding the highest levels that we've seen in 30 years.

I believe, just according to the latest to the — to the latest filings, that you all have something north of $15 billion worth of Japanese yen-denominated debt.

How does that stand? Will you still issue that debt? What are the maturities on some of those things? And what does it mean to see higher interest rates in Japan?

GREG ABEL:  Yeah, it's very — it's very topical, obviously, here in Tokyo and in Japan, in the newspapers.

I will say, Becky, I found it interesting. Not a single one of the trading companies raised it as a fundamental challenge right now.

And because they're still, when you think about, they're talking about the — yeah — but they're still relatively modest when you think about it. I think the 10-year hit, just a 30-year high —

BECKY QUICK:  Yeah.

GREG ABEL:  And it's, yeah, it went right to three percent as you're highlighting.

So, I think they see it as very manageable.

And then from our perspective, you're right, we — we have a bond — a debt portfolio there in yen that pretty much reflects the cost basis of our investments. And the 10-year — or the remaining life on that debt is a little more than five years.

And so, we still have a significant carry, i.e., the difference between the dividend and the interest we're paying.

But I would highlight that we would envision still raising debt as appropriate in yen.

And at the same time, we do see the underlying companies earning performance growing. We do see an increase in dividends likely over the coming years and continued share repurchases.

So, yes, there's an incremental cost, but clearly within the various trading houses, we do see nice increases in the underlying return on capital they're delivering back to shareholders.

BECKY QUICK:  Greg, we spoke with Warren Buffett back in July right here on CNBC and talked to him about a lot of things.

But one of the interesting things he brought up was the Berkshire portfolio.

Obviously, you're running things. He said that you're the decision maker, but that you all talk frequently, almost daily. And that the position that was initiated in Alphabet, he said, was his.

I just wonder if you could talk a little bit about your relationship with Warren, how you all are doing, and how you're managing that portfolio at this point, the stock portfolio for Berkshire?

GREG ABEL:  Yeah, great.

Well, a great example of it is Warren turned 96 on Sunday.

So, before I left to come to Tokyo, stopped in, had a — had a great celebration with Warren as he — as he turned 96 with his family and friends. So, we had a very nice afternoon.

After that, flew here to Tokyo. And Warren absolutely loves the Japanese investments and the companies we've invested in. So, I could tell it wasn't easy for Warren that off I went to Tokyo.

But yeah, we have a great working relationship in that we discuss a variety of things on a regular basis.

So, we would had some discussions, even on Sunday, about our Japanese investments.

And I talked to him earlier this morning just to give him an update on — on how each of the meetings went and how the companies are performing.

But it's a — it's a very much a — just a dialogue we've always had.

We love talking business. We love talking about what we're seeing across our portfolio.

And you're absolutely right, relative to the Alphabet position, Warren initiated that probably close to 15 months ago or a little bit more. And so, he initiated the initial purchases in Alphabet.

We continued — or he continued — and we discussed it then and continue to discuss it — initiated a variety of purchases.

And then I want to say, in late May, I received a call on a Sunday morning to see if we wanted to participate in their upcoming equity offering.

Really, no terms or amount were set. And I said, well, I'd get back to them right away.

And very much consistent with how we manage Berkshire, but also how we — the governance around it, I called Warren and I said, we had a significant opportunity to invest in — continue to invest in Google, but in a — in a — with a significant block. Discuss the size.

They hadn't set the size but recommended that we consider 10 billion and Warren talk — Warren and I discussed the size. We discussed the size of discount. And I'd recommended 6 1/2 percent discount. And we were comfortable with that.

And we went back to them and highlighted, we would be interested in a block on those terms and then ultimately consummated the transaction. 

BECKY QUICK:  Why do you like Alphabet?

GREG ABEL:  I think from the — just from a real high level, obviously, we don't discuss the underlying specifics of any of the concepts in — around any of our equity investments.

But the one thing that is unique with Alphabet, and I guess we do see this across our other businesses, but number one, obviously, we all are seeing and feeling the impact of AI.

So, we knew it was going to have a significant impact on America and businesses.

We have a lot of visibility from within our companies as to how we're using AI, what type of benefits it's delivering. So that brought incremental interest.

And then we saw Google as a significant player.

Now, there's a lot more to Google than what I just said and why we like it. But those were the fundamental reasons as to why we took a serious look at Google and now have a significant investment in it.

BECKY QUICK:  Well, let me ask you a little more about AI and the data center buildout that's taking place.

You're somebody who spent decades working in infrastructure, building at Kiewit and also at Berkshire Energy. So, you understand one of the key places that's seen as a limiting factor for AI buildout, and that's energy.

Where are we right now in terms of — the terms of that data center buildout? Where do you see opportunities, specifically for Berkshire?

GREG ABEL:  Yeah. So, it's really interesting, as they continue to announce all the data centers and data center sites.

I've sort of always had a strong view that energy would be the constraint. I — and there'd be energy. We can produce the energy. It's, do we have a —  how long it would take to get the sites prepared and being in a position they could serve the data centers? And I continue to see that as a big constraint.

We'll come to one of the other challenges.

So — and — but we do still see it as a significant opportunity for Berkshire and Berkshire Hathaway Energy, in that, for example, if you look at Iowa, where we have a number of data centers — I want to say last year, approximately 8 percent of our load came from data centers.

And we see incremental load coming on, both customers requesting it and what we can serve.

But we've really operated to some pretty basic principles right from the —  from the get-go.

And we've shared that with each of the hyperscalers. We've — and it's really policy we've — we've discussed with our state, our governors, and our regulators.

And we highlighted we are interesting — we are interested in serving these hyperscalers, one, if there was no impact to the rates of our other customers.

And in fact, we've pretty much taken the approach there has to be a net benefit to our customers.

The communities have to understand the impact on water. And that has become much more manageable as they address that, and use, you know, the technologies that are available to minimize water use.

And then, and then lastly, the communities have to be open to having the data center in their community.

We very much believe in the fact that you have to be a welcomed member of the community.

Now, that's a decision the data center has to make. But we can encourage them to seriously evaluate where — the reaction from the communities.

And I know you've had many discussions around it. There is a lot more pushback in the communities across the U.S.

We have not had any specific site rejected to date. We're continuing to move forward on the — on the various sites we have under construction.

And our sites would be the energy infrastructure, not the data center site. But it has to be done on the terms and conditions I just highlighted.

JOE KERNEN:  Greg — there — if you don't define a narrative, if there's a vacuum, then other people are going to define it for you.

There's a piece in The [Wall Street] Journal today just — about the data centers— protect the earth, build more data centers.

Their need for reliable power drives innovation, while AI helps develop new clean technology.

It just points out this could be a once in a generation opportunity to clean up the electricity grid and to learn how to improve water quality across the board and accelerate technologies —

GREG ABEL:  Right.

JOE KERNEN:  — that, you know, that the people that don't like this, they're behind a lot of these technologies and you could act —

There's a need for so much power, it could actually generate the type of change that they're looking for.

But if you don't — if you don't sell it that way, they're going to sell it a different way. I guarantee it.

GREG ABEL:  No — Joe, you're absolutely right. I mean, the narrative around these is so critical. And it continues to evolve.

So, it really did start from the impact on rates. And were you impacting other customers?

You can see they've — as you've just highlighted, they've moved on from that narrative.

I would say that the water narrative is very strong coming from the data centers and how they minimize the use.

And now, there's starting to evolve to, you know, other narratives.

I think a very strong narrative on the side, at least in Iowa, where it's still a strong farming community — when we see both the energy infrastructure put in place and a data center put in place in an individual county or community, the tax relief, specifically on property taxes, and also revenues that come into the county to support other services, schools, police, fire. It's very, very substantial.

And that — and that's equally has to be part of the narrative and make sure people recognize the benefits that come with — with that type of development. 

BECKY QUICK:  Hey, Greg, let's shift gears a little bit and talk about housing, specifically in the United States.

Obviously, since the last time we spoke with you, you all bought — or you bought the — made the acquisition in Taylor Morrison for $6.8 billion.

We also saw in the latest filings that came out, you had increased the stake in Lennar.

So, these are just some of the ways that Berkshire kind of plays into housing.

But you have so many different places that you are kind of measuring how the housing market is doing, from the paints that you sell, from other things that go into housing — building — but also from the real estate portfolio and Berkshire Hathaway real estate that follows through all of that.

What do you see happening in the housing market, particularly as interest rates and mortgage rates are rising in the United States? 

GREG ABEL:  Yeah, it's really interesting, because it was an important part of the discussions with Taylor Morrison and the discussions I had with Sheryl [Palmer], their CEO, in that when we looked at housing, and housing specifically in North America, we were taking a very long-term view, that — that American dream will continue to exist.

And five years, and 10 years from now, this will be a very strong asset for Berkshire, i.e., Taylor Morrison.

And I'll come back. We did combine, and are combining, some of our operations from Clayton Homes.

We had 15 site — what we call site builders — but home builders — over in Clayton Homes. They're now joining the Taylor Morrison team.

But the conversation we were having, Becky, was that we didn't see any type of immediate recovery or any type of hockey stick there. That we did see it, from Berkshire's perspective, that it was going to be a bumpy road for a while.

And obviously, as you're discussing it with people in the industry, there's — and we've got a great leader in Sheryl and brings great optimism — but you can see as we discuss it.

We don't — we don't envision a quick recovery there. But we do see it as an industry that we definitely want to be invested in, and we're invested in, for the — for the long-term.

BECKY QUICK:  And Greg, just when you look at the economy in the U.S., around the world, how are things doing from a business perspective? How is the consumer doing?

GREG ABEL:  Yeah, it's really interesting.

I mean, here in Tokyo, incredibly vibrant. You can feel a great deal of energy.

And when I met with the — with the five companies, the trading houses — very strong results they're having and feel very good about their businesses.

And that would be — a number of them are resource based.

But a number of the businesses also have what they call non-resource businesses, and they're performing very well.

If you look across our businesses and our results through the second quarter, again, very strong in our larger businesses, including our manufacturing businesses.

So, you can see there's still — still strong demand.

But I think you do feel the customer — there's a consumer that is still clearly feeling the pain and struggling and having to stretch a lot further to — with that — with that dollar.

And I think that does exist. There's no question when we look at the underlying results.

But at the same time, the fundamentals around the economy, at least from what we're seeing through the — through the second quarter, remain very, very strong.

BECKY QUICK:  Greg Abel.

Greg, thank you very much for joining us this morning — this evening — in Tokyo. We appreciate it.

GREG ABEL:  Thank you, Becky. Thank you, Joe. Have a great day. Thank you very much. 

BECKY QUICK:  You, too.

JOE KERNEN:  Thanks, Greg.

BECKY QUICK:  Again, Greg Abel, the CEO of Berkshire Hathaway.

GREG ABEL:  Thank you.

Some links may require a subscription:

The Wall Street Journal: Warren Buffett Turned 96 on Sunday. Here Are Some of His Best QuotesFinancial Times opinion: Why Berkshire Hathaway might be an active hedgeCNBCTV18 (India): Warren Buffett turns 96: Key investing lessons from the Oracle of OmahaDallas Morning News on MSN: Berkshire Hathaway's NetJets to get massive new Love Field campusBRK.A stock price: $759,350.01

BRK.B stock price: $506.03

BRK.B P/E (TTM): 12.72

Berkshire Cash as of June 30: $365.5 billion (Down 8.0% from March 31)

Excluding Rail Cash and Subtracting T-Bills Payable: $359.2 billion (Down 3.8% from March 31)

Berkshire repurchased $4.5 billion of its shares in Q2 2026.

Berkshire's top holdings of disclosed publicly traded stocks in the U.S. and Japan, by market value, based on the latest closing prices.

Holdings are as of June 30, 2026, as reported in Berkshire Hathaway's 13F filing on Aug. 14, 2026, except for:

Mitsubishi, which is as of April 30, 2026The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.

Please send any questions or comments about the newsletter to me at [email protected]. (Sorry, but we don't forward questions or comments to Buffett himself.)

If you aren't already subscribed to this newsletter, you can sign up here.

Also, Buffett's annual letters to shareholders are highly recommended reading. There are collected here on Berkshire's website.

-- Alex Crippen, Editor, Warren Buffett Watch

Berkshire Hathaway (BRKA -0.60%)(BRKB -0.34%) has historically been one of the largest shareholders of U.S. banks, and that's still true today. The conglomerate maintains large stakes in Bank of America (BAC +0.08%) and American Express (AXP -1.81%), while also holding several smaller positions in the financial sector.

New CEO Greg Abel and his team might be souring on the banking industry, or at least might see good reasons to reduce exposure to it. In the most recent quarter, Berkshire sold shares of three bank stocks, while simultaneously pouring billions of dollars into the technology sector.

Image source: Getty Images.

There's more to the story, however. Here's a rundown of Berkshire's three bank reductions, and what investors should keep in mind.

Berkshire Hathaway was a net buyer of stocks in the second quarter for the first time in several years. But that's not the case when it comes to the financial sector. As mentioned, Berkshire reduced its stakes in three bank stock positions:

Capital One (COF -1.48%) was reduced by 58%, the sharpest percentage decline. Berkshire now owns about $646 million of Capital One stock, representing about a 0.5% stake in the company.Bank of America (BAC +0.08%) was reduced by $1.7 billion, as Berkshire sold 30.2 million shares. It now owns 483.4 million shares, and Bank of America remains one of the largest holdings in the portfolio.Ally Bank (ALLY -0.85%) was the smallest of the three sales, with Berkshire reducing its stake by 7%. Berkshire now owns 8.9% of Ally, a stake valued at about $1.14 billion.Let's put this in some context. Capital One experienced a significant reduction in its position. Berkshire sold about $750 million in the bank's stock (we don't know the exact selling price). Bank of America was the largest sale by dollar amount, and Berkshire has been gradually selling shares over the past few quarters, but it remains a massive part of Berkshire's portfolio. Even after the sale, Berkshire owns nearly 7% of Bank of America, a stake worth more than $30 billion.

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Finally, don't read too much into the Ally sale. After the reduction, Berkshire owns about 9% of Ally and, for regulatory reasons, aims to keep this stake below 10%. So, this could simply be a sale to ensure that Ally buybacks wouldn't push it above the threshold.

Why did Berkshire sell bank stocks?To be sure, we don't know exactly why Berkshire sold. Leadership generally doesn't discuss the specific motivation behind individual transactions. There could be concerns about consumer credit deteriorating, which could explain the sharp reduction in credit card-focused Capital One, in particular.

Berkshire could also potentially be worried about interest rate risk. Rising interest rates are good for banks in some ways, but banks that typically offer minuscule deposit rates (like Bank of America) could have a tougher time competing in a "higher for longer" environment without raising deposit rates, which would cut into margins.

Another explanation could be valuation or position sizing. Between American Express and Bank of America alone, the portfolio is rather concentrated in the financial sector. The sector has performed extremely well in 2026, and this could be a bit of profit-taking in names that have made Berkshire quite a bit of money.

The bottom line is that we don't know for sure. And just because Berkshire sold shares of these stocks doesn't necessarily mean that you should do the same. Full disclosure: Bank of America is one of my largest investments, and I'm not selling a single share because Berkshire did. But it is causing me to take a step back and keep a closer eye on the health of the U.S. consumer to watch for cracks forming.

Bank of America is an advertising partner of Motley Fool Money. Ally is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. Matt Frankel, CFP® has positions in American Express, Bank of America, and Berkshire Hathaway. The Motley Fool has positions in and recommends American Express and Berkshire Hathaway. The Motley Fool recommends Capital One Financial. The Motley Fool has a disclosure policy.

Berkshire Hathaway (BRKA -0.18%)(BRKB -0.19%) bought back $4.5 billion of its own stock in the second quarter, its most aggressive pace of buybacks in several years. Unlike many other companies that buy back stock, Berkshire can do so only when CEO Greg Abel and Chairman Warren Buffett agree that the stock is trading below its intrinsic value.

Are they right? Is Berkshire truly a cheap stock right now?

Of course, it's tough to do a full piece-by-piece analysis in a short article, but we can use the three main parts of Berkshire Hathaway's business to help determine if the stock is cheap or expensive.

Image source: Getty Images.

Berkshire: A sum of three parts As of this writing, Berkshire's market cap is about $1.09 trillion. If the sum of the parts is worth more than that, it's trading for less than its intrinsic value.

Thankfully, two of the three parts of the business are easy to value. At the end of the second quarter, Berkshire had $365.5 billion in cash and Treasuries on its balance sheet. And as I'm writing this, Berkshire's stock portfolio is worth about $360.5 billion. Subtracting these two numbers shows that Berkshire's operating businesses are being valued at about $364 billion.

Over the past four quarters, Berkshire has produced just over $48 billion in operating earnings. After subtracting investment income from the insurance business (which is mostly the interest earned on its cash), Berkshire's operating income was $35.8 billion.

This means that Berkshire's operating businesses are trading for about 10.2 times trailing earnings. That's a very low multiple. For context, the average stock in the S&P 500 trades for about 28 times earnings. The average energy company (a big part of Berkshire's business) trades for a mid-teen multiple, and the average railroad stock (Berkshire owns BNSF) trades for about 22 times earnings, just to name a few components.

Of course, there are many moving parts to consider, and not every sign points to a high valuation. For example, insurance companies are generally trading for a low double-digit earnings multiple right now, and Berkshire's GEICO has been underperforming its peers in recent years.

Having said that, there's a solid case to be made that Berkshire's intrinsic value is significantly higher than its current market value. Exactly how much higher is a tougher question to answer. If you were to ask 10 experienced stock analysts to calculate the intrinsic value of Berkshire's stock, you'd probably get 10 different answers. However, it's easy to see why Abel might have decided to step on the gas when it comes to buybacks, given the low value the market is assigning to its operating businesses.

After six decades of steering clear of investments in department stores, Berkshire Hathaway (BRKA -0.24%) (BRKB -0.04%) is suddenly investing in a retail icon. I'm talking about Macy's (M -3.08%), the legendary retailer.

Berkshire's last department store investment was Hochschild Kohn, a Baltimore-based retail chain, back in the 1960s, but apparently it didn't go as planned, so CEO Warren Buffett became wary of traditional retailers.

Image source: Getty Images.

Berkshire first invested in Macy's in the first quarter of this year, buying about 3 million shares, a 1% stake in the retailer valued at around $55 million. It significantly increased its stake in the second quarter to 7.37 million shares. At a share price of $23.55, Berkshire's investment in Macy's is now worth about $174 million. That's about 2.8% of Macy's outstanding shares.

To be sure, that's a small investment for the massive conglomerate, which holds stakes worth tens of billions of dollars in companies like Apple, American Express, and Google parent Alphabet. And Berkshire's latest investments, mainly in Alphabet, are in tech stocks quite different from a retailer founded in 1858.

So what is the sudden appeal of Macy's stock for Berkshire?

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First-quarter results were impressive Well, Macy's had a strong first quarter, its best in four years. Revenue climbed 2% to $4.9 billion, and net income soared 66% to $63 million. Earnings per share rose 77% to $0.23. All of those beat Wall Street expectations. Management also raised its full-year outlook. It sees sales of between $21.5 billion and $21.75 billion, with earnings per share somewhere between $2 and $2.25.

Yet analysts who cover the stock don't seem to expect much upward price movement. The average price target is $22.77, nearly $1 below the current price. Of the 13 analysts who follow it, 10 have the stock as a hold, two as a buy, and one as a sell.

Yet perhaps Berkshire is impressed by the ongoing turnaround at the retailer, which also owns Bloomingdale's department stores and Blue Mercury, a luxury beauty and spa retailer. Two years ago, Macy's launched a strategy to close some 150 underperforming stores and focus on 350 others, many of which it will upgrade with a better customer experience.

The stock is also relatively inexpensive, trading at just about 10 times trailing-12-month earnings. We know that Berkshire loves a bargain or, more likely in this case, a stock it considers undervalued by the market.

American Express is an advertising partner of Motley Fool Money. Matthew Benjamin has positions in Alphabet and Berkshire Hathaway. The Motley Fool has positions in and recommends Alphabet, American Express, Apple, and Berkshire Hathaway. The Motley Fool has a disclosure policy.

Berkshire Hathaway (BRKA -1.08%)(BRKB -1.15%)'s 13F filing for the second quarter came out recently, which highlighted the company's changes in holdings during the period. While under previous CEO Warren Buffett, the company has been cautious about buying stocks and adding to its positions, that has changed of late under Greg Abel, who took over at the start of 2026.

These were the three biggest changes in Berkshire's holdings in the second quarter.

Image source: Getty Images.

The company drastically increased its position in AlphabetBerkshire bought Alphabet (GOOG -0.61%)(GOOGL -0.55%) stock last year but has since increased its position in the tech giant. Buffett claims to have been "initiated" into the initial purchase of it. But under Abel, the position has become more significant and prominent. In Q2, Alphabet bought approximately $17 billion worth of Alphabet stock, bringing its total position in the company to 106 million shares. And at $36 billion in total, it has now become its third-largest holding, behind just Apple and American Express.

It's a notable move for Berkshire, which has typically shied away from the tech sector. Alphabet is among the most valuable companies in the world, with a market cap exceeding $4 trillion. However, it's arguably in the same realm as Apple, another top Buffett holding. In terms of earnings, Alphabet isn't all that expensive, trading at about 17 times its expected future earnings (based on analyst estimates). Like Apple, it also has a strong competitive advantage, or moat, which Buffett loves to see from businesses.

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While Alphabet is a bit surprising simply because it's in tech and how big its position is, it's the type of stock that certainly makes sense within Berkshire's portfolio.

It added more shares of Delta Air LinesAnother big move for Berkshire during Q2 was adding to its position in Delta Air Lines(DAL -1.97%). It bought 17.5 million shares during the period, bringing its total to 57 million. Although it's not one of Berkshire's largest holdings, it accounts for a little over 1% of the portfolio, so it's still a decent amount.

Delta reported strong earnings back in July, noting "broad demand strength" and expecting "mid-teens revenue growth and double-digit margin" for the current period. It also increased its dividend by 15%, a clear sign of business strength and confidence in its future performance.

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Previously, under Buffett, Berkshire largely avoided airlines, exiting its position in four major airlines, including Delta, back in 2020. Now, however, Abel appears to have a greater appetite for the airline industry, with Delta being one of the company's more notable stock purchases during the most recent quarter.

Berkshire continued to trim its position in Bank of AmericaThe largest stock sale for Berkshire during the period involved its stake in Bank of America (BAC -0.93%). The company reduced its position in the top bank by about 6% by selling more than 30 million shares. It's been a trend for multiple quarters at Berkshire, as its position in Bank of America has diminished over the past couple of years, reduced more than 50% after eight quarters of sales.

Even amid the reductions, however, Bank of America remains one of Berkshire's largest holdings, accounting for nearly 9% of its entire portfolio. That's now less than Alphabet, but it's still sufficient to make it a top-five holding.

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The move may simply have been to reduce exposure to financial stocks, as American Express is already the second-largest position in the company's portfolio. But at $1.7 billion, it was Berkshire's largest reduction in value during the second quarter.

Berkshire's portfolio is changing but remains in excellent shapeThere were other changes within Berkshire's portfolio, but the most significant moves were its additions to Alphabet and Delta Air Lines, and the largest cut was in its stake in Bank of America. All in all, Abel appears to be more active of late, and perhaps that's a sign that he's more comfortable in his position as the company's new leader.

It's a good sign for investors that he's willing to put the company's cash to use, and it may help unlock greater gains for Berkshire by enabling it to capitalize on new opportunities. But with the company still taking a thoughtful approach to its purchases and investing in quality stocks, it remains in solid shape and still makes for an excellent long-term holding.

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Two of the most closely tracked investors in America moved in opposite directions on the same consumer lender last quarter. According to Q2 2026 13F filings, positions as of June 30, 2026, filed August 14, 2026, Berkshire Hathaway (NYSE:BRK.B | BRK.B Price Prediction) sold 4,150,000 shares of Capital One, leaving 3,000,000 shares valued at $601,860,000, a share delta of about negative 58%.

In the same quarter, Dan Loeb’s Third Point bought 685,000 shares to reach 825,000 shares, valued at $165,511,500, with a share delta of roughly 4.89. George Soros’ Soros Fund Management also trimmed, selling 33,043 shares to 147,062 shares, valued at $29,503,578.

One note before we move further: Buffett retired as Berkshire’s CEO at the end of 2025, but remains active as Chairman of the company. Greg Abel now makes day to day decisions for the conglomerate.

What Capital One Actually Is Capital One (NYSE:COF) is a consumer credit machine. Credit cards and auto lending drive the business, which means earnings are levered to the health of the American household. Q2 2026 revenue reached $15.85B, with Domestic Card revenue of $11.10B, up 30% year over year after the May 18, 2025 Discover acquisition and the April 7, 2026 Brex deal. Diluted EPS came in at $4.73.

The Berkshire Side Capital One was not an isolated trim. In the same filing, Berkshire also cut Bank of America (NYSE:BAC) by 30,230,150 shares to 483,394,015 shares and cut Ally Financial (NYSE:ALLY) by 2,000,000 shares to 27,000,000 shares. The filings show a broader lightening of consumer-credit exposure. The disclosures reveal positioning changes only. Funds sell for rebalancing, risk limits, and dozens of other reasons.

The Loeb Side Third Point moved the other way, multiplying its position from a small base. Loeb is buying a franchise trading at a trailing PE of 13, a price-to-book of 1.226, and a forward PE of 11, with an analyst target price of $256.5 against a current price of $227.34. Return on tangible common equity ran 18.04% last quarter.

What Would Make Each Side Right Berkshire’s trim looks vindicated if consumer credit quality cracks. Today it is not cracking. The domestic card charge-off rate fell 39 basis points sequentially to 4.71%, and the FRED credit card delinquency series sits at 2.92%, inside the normalizing band.

Loeb wins if the Discover integration compounds as management projects. CEO Richard Fairbank said Capital One is “14 months into our planned 24-month integration of Discover, and integration is going well.” The Global Payment Network volume of $189.6B, up 156% year over year, hints at the optionality.

The Takeaway Two elite investors read the same filings and reached opposite conclusions. In the most recent quarter Berkshire’s largest additions were Alphabet (Nasdaq: GOOGL) and Delta Airlines. Its largest sells included Kroger, Bank of America, and Capital One. The company’s largest positions are Apple, American Express, and Coca-Cola.

The largest buys for Loeb in the quarter were Warner Bros, Alphabet, and Keysight Technologies. Loeb’s biggest sells were Amazon, Telephone and Data Systems, and Carpenter Technology. It’s worth noting where the two agree: both funds have beeen loading up on Alphabet.

Contact [email protected] for any questions or corrections.

Berkshire Hathaway's second-quarter 13F filing, due on Friday, is expected to offer investors a clearer picture of how CEO Greg Abel is reshaping the conglomerate's equity portfolio after taking over from Warren Buffett.

The filing marks only the second quarterly portfolio disclosure under Abel's leadership and follows an active first quarter in which Berkshire became a net buyer of equities for the first time in years.

While Berkshire has already revealed in its quarterly report that it purchased more than $23 billion of stocks during the second quarter, the upcoming 13F will disclose where much of that capital was deployed.

The biggest confirmed investment during the quarter was Berkshire's purchase of at least $10 billion worth of Alphabet stock as part of the Google parent's equity fundraising tied to its AI infrastructure spending.

According to Barron's estimates, Berkshire had already accumulated roughly 58 million Alphabet shares before the latest purchase.

The additional investment increased that holding to about 86 million shares, while further buying during the quarter could have pushed the stake close to 100 million shares by the end of June.

If that estimate proves accurate, Alphabet would be worth nearly $35 billion within Berkshire's portfolio, placing it alongside Coca-Cola as one of the conglomerate's largest equity holdings behind Apple and American Express.

Beyond Alphabet, Berkshire disclosed purchases of nearly $2 billion in Japanese insurer Tokio Marine and more than $1 billion of additional investments in the Japanese trading companies in which it already owns significant stakes.

Berkshire's second-quarter filing also showed more than $23 billion of equity purchases overall, leaving roughly $7 billion of investments yet to be identified in the upcoming 13F filing.

Investors will also be watching for entirely new positions after Berkshire initiated stakes in Delta Air Lines, Macy's and Alphabet during the first quarter, the first major portfolio additions under Abel's leadership.

Speculation has centered on whether Berkshire could have initiated a position in Microsoft after the stock weakened during the second quarter.

Barron's noted that Berkshire's undisclosed purchases are likely concentrated within what the company classifies as commercial, industrial, and other businesses, based on changes disclosed in its quarterly report.

Although Berkshire sold more than $3 billion of stocks during the second quarter, that represented a much slower pace than the more than $24 billion sold in the first quarter.

Investors will be looking closely at whether Abel continued trimming legacy holdings.

Kraft Heinz remains one of the most closely watched positions after Abel acknowledged in his shareholder letter that "our investment in Kraft Heinz has been disappointing." He added that "our return has been well short of adequate," signaling that further reductions remain possible.

Constellation Brands is another holding that could disappear entirely after Berkshire cut roughly 95% of its position during the previous quarter.

Smaller holdings such as Jefferies Financial could also face additional reductions.

At the same time, Abel has emphasized Berkshire's long-term conviction in several core investments.

In his shareholder letter, he wrote that "Apple, American Express, Coca-Cola, and Moody's" are businesses Berkshire understands well, respects for their leadership and expects "will compound over decades."

It's been one of the bigger narratives regarding Berkshire Hathaway (BRKA -2.16%) (BRKB -2.18%) for a while now. That is, the conglomerate's been piling up more and more idle cash by selling more stocks than it's been buying for its equity portfolio. Through Q1 of this year, in fact, Berkshire's done so for 14 consecutive quarters.

It's a sign that, for a while now, CEO Greg Abel and his predecessor Warren Buffett have seen little worth owning at the price being asked. This, of course, has implications for all investors.

There's a glimmer of hope on the horizon, though. During the company's second fiscal quarter ending in June, Berkshire finally bought more stock for its equity portfolio than it sold, suggesting there are bargains out there worth buying into.

Image source: Getty Images.

The numbers for Berkshire Don't get too excited. Abel -- with board chairman Buffett's likely guidance -- isn't exactly plowing into every name he had his eye on. In Q2, the company only made net stock purchases of $19.8 billion, buying $23.5 billion of them, while only selling $3.7 billion of its equity holdings.

Data source: Berkshire Hathaway. Chart by author.see attached spreadsheet for source links

That's only a fraction of the $397.4 billion in liquidity it started the quarter with, and still only a tiny part of the $365.5 billion in cash and cash equivalents ($6.3 billion of which is spoken for by wholly owned railroad BNSF) it's sitting on now. But it's a start ... maybe.

A subtle but important hint It's certainly not a splashy dive into the stock market. Then again, it wouldn't be.

Buffett was rarely in a hurry to invest Berkshire Hathaway's idle cash, particularly in the middle part of bull markets when valuations tend to reach above-average levels. Abel isn't likely to be in any hurry either, even if he does appear more willing to proverbially dip his toes into the water than Buffett was shortly before stepping down from his role as CEO -- and chief stock picker -- at the end of last year.

In other words, don't be too discouraged that most of Berkshire's cash that was on the sidelines as of the end of Q1 is still on the sidelines. Also, remember that Berkshire Hathaway only completed its all-cash $6.8 billion acquisition of homebuilder Taylor Morrison in July of this year, after the second quarter had ended.

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Perhaps the bigger takeaway for investors is that while the market as a whole may arguably remain overvalued -- the S&P 500's (^GSPC -0.32%) forward-looking price/earnings ratio right now is near multiyear highs, in fact -- Berkshire's second-quarter net investments suggest there are individual prospects out there still worth considering.

To this end, we don't yet know exactly which stocks Berkshire Hathaway bought in Q2. The conglomerate might have purchased some new names, or it may have merely expanded its existing positions, or it may have combined both. We won't know for sure until the company files its 13F disclosure document, probably sometime later this week. As always, of course, that filing could be a great source of ideas for your own portfolio.