Buffetts $128 Billion Cash – Nowhere To Run – Nothing To Buy

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Few Places Left To Spend His Cash

Berkshire Hathaway BRK.B NYSE : These shares are up 25% since mid summer . Although the US economy is heated and headed higher , values have skyrocketed leaving few investment opportunities . Two out of three analysts rate this stock a STRONG BUY     Chipotle In Investor Spotlight – Up And Away

Buffetts trademark , taking large positions in ” value stocks” isnt as easy as it was in 2008 . Buffett is struggling to find a place to put his money. Remember Buffett is a value investor , not a distress investor taking advantage of poor management and turning around a bad situation.. Buffett’s strategy has been to invest in top notch management in an out of favor industry.

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Berkshire Hathaway Inc. BRK.B NYSE  cash pile hit a record in the third quarter, as Warren Buffett continued his hunt for large companies to buy at attractive prices without success

Berkshire held $128 billion in cash or short-term Treasurys as of Sept. 30, the company said, up from $122 billion at the end of the second quarter.

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Berkshire bought back about $700 million of its own shares in the third quarter, bringing its total buybacks for the year to $2.8 billion, the company said. The Omaha, Neb., conglomerate changed its buyback policy last year, and some shareholders are frustrated the company hasn’t spent significantly more cash repurchasing its stock.

Berkshire reported third-quarter net earnings of $16.5 billion, or $10,119 per Class A share equivalent, from $18.5 billion, or $11,280 a share, in the year-earlier period. Last year’s third-quarter earnings surged due to unrealized investment gains.

Operating earnings, which exclude some investment results, rose to $7.9 billion from $6.9 billion in the year prior.

The conglomerate runs a large insurance operation as well as railroad, utilities, industrial manufacturers and retailers. Its holdings include recognizable names like Dairy Queen, Duracell, Fruit of the Loom, Geico and See’s Candies.

Berkshire’s insurance business sits at the core of its moneymaking machine. Insurance brings in billions of dollars of “float,” upfront premiums customers pay and that Berkshire invests for its own gain. Berkshire also holds large stock investments, including in Apple Inc. and Wells Fargo & Co. As of Sept. 30, Berkshire held nearly $100 billion in financial-services stocks, underscoring the size of its bet on the future of the U.S. economy.

The 89-year-old Mr. Buffett, whose shrewd investments have earned him the nickname “the Oracle of Omaha,” has complained in recent years about the challenge of finding acquisition targets that are large enough to move the needle for Berkshire and are reasonably priced.

“Prices are sky-high for businesses possessing decent long-term prospects,” he wrote in his 2018 letter to shareholders. – From Wall Street Journal 

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