Warren Buffett isn’t hot on stocks right now, and the 94-year-old CEO’s latest moves reflect that. Berkshire Hathaway on Saturday said its cash pile swelled to a record $325.2 billion in the third quarter, up from $276.9 billion at the end of June. For context, that’s more than the market value of Nike , Goldman Sachs , Coca-Cola and Disney . The cash hoard has grown as Berkshire pared down stakes in key holdings such as Apple and Bank of America . The conglomerate sold about 300 million Apple shares in the third quarter, or roughly 25% of its stake. It’s also raked in more than $10 billion from steadily selling Bank of America shares since the summer. On top of that, Buffett isn’t buying back his own stock. Berkshire, which repurchased $345 million of shares in the second quarter, didn’t buy back any shares back during the latest selling spree. Nicholas Colas, co-founder of DataTrek Research, highlighted three possible reasons for this “unusual activity” from the Oracle of Omaha: “Buffett sees stocks as overvalued, including his own, and therefore susceptible to a deep correction or outright bear market,” Colas said in a note to clients. Indeed, Buffett has prided himself in looking for solid investments that are undervalued. The S & P 500 trades at a forward price-to-earnings multiple of 21.5, near its highest level going back to April 2021. It’s also only about 2.5% below a record high. Berkshire Class A stock trades at 22.6 time earnings. Earlier this year, it traded at its highest multiple since May 2022. “Buffett may soon step back from active portfolio management and wants to clear the decks for his successors to remake Berkshire’s portfolio and rethink the company’s stock repurchase program,” Colas wrote. Buffett has already named his successor, Greg Abel, though he hasn’t signaled when he will step down. Lastly, Colas noted that Buffett may have “have identified one or more large acquisitions and is raising capital for those purchases.” But that’s probably less likely given his age and the planned succession. Elsewhere on Wall Street this morning, Morgan Stanley upgraded Roblox to overweight from equal weight. “RBLX is proving that its [user-generated content]-platform can drive accelerating share gains, as it reaches larger/more diverse audiences across more platforms,” the investment bank said in a Monday note to clients. “Micro milestones leave us confident in its ability to execute from here and exceed expectations.”
3 reasons why Warren Buffett is shunning stocks — including his own
