Berkshire's cash reserves reached a new high of $381.7 billion, and Buffett has net sold stocks for 12 consecutive quarters "to remain cautious."

Berkshire Hathaway's cash soared to a record high of $381.7 billion in the third quarter, with operating profit increasing 34% year-over-year, providing ample financial flexibility before Warren Buffett hands over the reins at the end of the year. (Background: Buffett admitted, “I really feel old, thinking and reading have become more challenging… this is the first time I've talked about stepping down as CEO of Berkshire”) (Additional context: Buffett's early investment in the Brazil crypto-friendly bank Nu Holdings, with Berkshire Hathaway's holdings reaching $1.2 billion) The investment titan Warren Buffett's Berkshire Hathaway presented its third-quarter financial report on the 1st, revealing that cash reserves have surged to a new high of $381.7 billion, with operating profit up 34% to $13.5 billion. This substantial cash position is a key indicator for observing the stability of the handover and future investment strategies.

Insurance underwriting stability boosts profits According to reports, this quarter's profits mainly came from the insurance underwriting business. The third quarter of 2023 so far has been a “low-loss” period, with global disaster losses dropping to the lowest level since 2006, around 72% below the historical average. The pressure from claims faced by underwriting has significantly eased, and the insurance and reinsurance sectors reported pre-tax underwriting profits. This is in stark contrast to last year when losses were caused by hurricanes and wildfires.

High cash position reveals a cautious attitude Buffett again net sold $6.1 billion in stocks during the third quarter, marking the twelfth consecutive quarter of net selling. The company also suspended stock buybacks for five consecutive quarters, even though stock prices fluctuated due to the upcoming handover, they still did not utilize treasury stock.

The market generally interprets this as a reminder of “high valuations”: lacking large acquisition targets that meet the criteria, cash is temporarily withheld from investment, waiting for valuations to return to reasonable ranges. The decline in short-term interest rates has reduced cash interest income by 13%, dropping to $3.2 billion, but Buffett still chose to retain his firepower.

Outlook: Continuation or acceleration of strategy? Market focus has shifted to how Abel will utilize cash after taking over Buffett's position at the end of the year. Whether he will continue Buffett's tradition of emphasizing patience and price discipline, or accelerate capital allocation during expansion opportunities, will be one of the most watched points before 2026.

For investors, Berkshire's latest financial report reiterates three points: first, the importance of cash flow management; second, cautious valuation can reduce risk; third, a diversified business portfolio can still provide stable returns in uncertain environments. The global market is closely watching when this $381.7 billion will be activated, as every move from Berkshire could change the landscape of mergers and acquisitions and the market atmosphere.

Further reading: Who is Greg Abel, Buffett’s chosen successor for Berkshire? How does he view crypto assets? Related reports: Buffett's shareholder letter hides a secret: Holding cash waiting for a stock market crash? Could a bear market repeat the internet bubble disaster? Buffett’s latest shareholder letter “makes no mention of crypto assets”! Cash reserves hit a new high, but he emphasizes a continued preference for stock investments. Who is Greg Abel, Buffett's chosen successor for Berkshire? How does he view crypto assets? “Berkshire's cash reserves reach a new high of $381.7 billion, with Buffett net selling stocks for 12 consecutive quarters while 'remaining cautious'” This article was first published on BlockTempo, the most influential blockchain news media.