In the third quarter of 2024, Warren Buffett's Berkshire Hathaway took notable steps to raise its cash reserves, selling off a substantial portion of its stock holdings, including a major reduction in Apple shares. As of the latest report, Berkshire’s cash reached a new high of $325.2 billion, after selling off approximately $36.1 billion in stocks, including Bank of America shares. This strategic move aligns with Buffett's recent caution toward stock investments.

The conglomerate also faced a 6% drop in quarterly operating profit, attributed largely to rising insurance liabilities and currency-related losses. The insurer's underwriting profit took a hit, with significant liabilities due to Hurricane Helene, and currency pressures intensified by the strengthening U.S. dollar. These pressures outweighed performance improvements in other areas, such as the Geico auto insurance business, which saw reductions in accident claims and expenses, and Berkshire Hathaway Energy, which benefited from lower operating costs.

Berkshire revealed that during the summer, it sold roughly 100 million shares—around 25% of its Apple holdings—leaving it with about 300 million shares. In 2024, Berkshire has reduced its Apple stock by over 600 million shares, yet Apple remains its largest equity investment at $69.9 billion. The sales represent a considerable portion of the $36.1 billion in stock sales for the quarter, including Bank of America shares.

Though Buffett had previously indicated Apple would likely continue as Berkshire’s primary stock investment, he acknowledged that selling was prudent, given the current 21% federal tax rate, which could increase in the future. Berkshire bought only $1.5 billion in stock during Q3, marking the eighth consecutive quarter it was a net seller. The company also refrained from repurchasing any of its own stock, hinting at Buffett’s view that Berkshire shares are not undervalued.

Operating profits from Berkshire’s diverse business segments, which span insurance, energy, railroads, and manufacturing, dropped to $10.09 billion, translating to about $7,019 per Class A share, down from $10.76 billion the prior year. The decrease was primarily due to a 69% reduction in insurance underwriting profit, impacted by rising claims, $565 million in losses from Helene, and settlement costs related to the now-bankrupt talc supplier Whittaker Clark & Daniels. However, Geico saw underwriting profit almost double, offering a counterbalance to the losses.

Additionally, Berkshire estimated pre-tax losses between $1.3 billion and $1.5 billion in the fourth quarter, linked to damages from Hurricane Milton, which struck Florida in October. Despite these challenges, Berkshire’s net income surged to $26.25 billion, or $18,272 per Class A share, contrasting with a $12.77 billion net loss a year earlier, largely due to stock price volatility that affected investment valuations. Buffett, however, advises investors to focus on operating results, which better reflect Berkshire’s underlying performance.

Buffett, 94, who has steered Berkshire since 1965, is expected to pass on leadership to Vice Chairman Greg Abel, 62, in the future. Headquartered in Omaha, Nebraska, Berkshire Hathaway manages a vast array of businesses beyond finance, including industrial operations, a real estate brokerage, and consumer brands such as Dairy Queen and Fruit of the Loom.