Berkshire Hathaway, Warren Buffett’s investment group, is taking advantage of the rise in interest rates. Given the lack of investment opportunities that it finds attractive, the group has accumulated a liquidity position of just over 157,000 million dollars (about 146,500 million euros), according to its latest quarterly report, published this Saturday by the company. Most of that money is invested in US Treasury securities.
In its balance sheet, the company details that as of September 30 it had 126,401 million dollars in short-term Treasury securities, plus 25,573 million dollars in cash and equivalents in its insurance division and another 5,267 million in the railways, energy and services. In total, 157,241 million, a record in the history of Berkshire Hathaway. The company does not separate interest from other financial income, but the item that groups them together has skyrocketed due to the rise in rates.
At the end of the quarter, the company that Warren Buffett presides over at the age of 93 had an investment portfolio in shares of 318,621 million dollars, with latent capital gains of 207,307 million. Five values account for 78% of his portfolio: Apple, with 156.8 billion; Bank of America, with 28,300; American Express, with 22,600; Coca-Cola, with 22,400, and Chevron, with 18.6 billion. Beyond changes in portfolio value, Buffett has continued to make net divestments.
Berkshire Hathaway suffered accounting losses of $12,767 million in the quarter, mainly due to the fall on the stock market during that period in Apple shares, its main investment, valued at $156.8 billion at the end of the quarter. The company insists in its results that accounting standards require these changes in value to be recorded in the income statement even if it is a stable investment and detracts from its value: “The amount of profits/losses on investments in a given quarter “It is often irrelevant and provides net earnings (loss) per share figures that can be very misleading to investors with little or no knowledge of accounting standards.” points out.
For this reason, the company prefers to look at the evolution of its businesses. Operating income improved 40.6% in the third quarter, to $10,761 million. In the accumulated amount of the first nine months of the year, it reaches 28,869 million dollars, 19% more than in the same period a year before. Much of the improvement is due to the recovery of the insurance business, which suffered losses of $1,072 million in the third quarter of 2022 due to the accumulation of catastrophes and which has now contributed $2,422 million in operating income.
The company allocated approximately 1.1 billion to repurchase its own shares, bringing the total for the first nine months of the year to 7 billion dollars.
Berkshire Hathaway shares have risen almost 14% on the stock market so far this year. The company has a stock market valuation of about $770 billion.
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