All articles tagged with #cash hoard
Berkshire Hathaway's operating earnings surged 34% to $13.485 billion in Q3, driven by a significant increase in insurance income, while its cash reserves hit a record $381.6 billion with no share buybacks, and Buffett plans to step down as CEO with Greg Abel taking over.
Former President Donald J. Trump faces financial pressure as he seeks to find enough cash to stave off asset seizures while appealing judgments against him totaling at least $537 million, including a $454 million civil fraud trial and an $83.3 million defamation case. Despite Trump's claims of having substantial cash reserves, his lawyers offered a bond of only $100 million while appealing the $454 million judgment, raising questions about his actual liquidity. If he fails to post the required cash or bond, New York's attorney general has warned she will move quickly to seize some of his buildings.
A nearly $6 trillion cash hoard sitting on the sidelines could potentially fuel further gains in U.S. stocks as the Federal Reserve shifts its stance. Soaring yields have attracted cash into money market funds, but the Fed's recent dovish pivot may prompt investors to deploy cash into riskier assets like stocks. Historically, cash has returned an average of 4.5% following the last rate hike, while U.S. equities have surged by 24.3%. However, not all the cash in money market funds may be available for investment, and the size of money market assets relative to the stock market is smaller than in previous peaks.
Berkshire Hathaway reported a net loss of $12.77 billion in the third quarter, but its operating income rose by 40.65% to $10.76 billion. The company's cash hoard reached a record $157.2 billion, largely invested in U.S. Treasury bills. Stock buybacks slowed down in the third quarter, with $1.1 billion in repurchases. Apple's 12% drop in the quarter negatively impacted Berkshire's stock portfolio. Charlie Munger praised the firm's Japanese trading company bets, which have yielded significant returns.
Analysts expect Berkshire Hathaway's second-quarter earnings to fall 8% compared to the previous year, with revenue expected to increase nearly 6%. Investors will be looking for information on the company's operating income, whether there were any changes in its equity holdings, the amount of Berkshire stock bought back, and if the cash hoard grew during the quarter. Berkshire Hathaway has been adding to its stake in Occidental Petroleum and recently agreed to buy out Dominion Energy's stake in a Maryland liquefied natural gas export project. Specific Q2 stock buys and sells will be released in a few weeks.