Warren Buffett’s industrial and insurance conglomerate Berkshire Hathaway ended the second quarter with a record $122 billion in cash.
As per an earnings report released on Saturday, it posted $6.14 billion in operating earnings in the quarter ending in June, which was $6.89 billion in the same quarter last year. Net earnings were $14 billion.
The company’s cash pile keeps growing and Buffet said he wants to make a big acquisition, but he stated to shareholders that this year said prices are sky-high for businesses possessing decent long-term prospects.
Buffett mentioned last year that his investment philosophy is to continue with “big, ‘easy’ decisions and eschew activity.”
The lack of spending suggests that Buffett is still optimistic in the current economy.
Notably, the billionaire’s Berkshire famously invested in Goldman Sachs during the 2008 financial crisis, at a chaotic time when hardly any other than the government were interested to lay dollars down.
Trip Miller, managing partner at Gullane Capital says hopefully, cash will serve Buffet and his partners well when the market suffers a pullback.
The company registered operating earnings that are slightly down year over year, reasoning lower income from insurance underwriting.
Berkshire also revealed that receive financial statements for Q1 and Q2 from Kraft Heinz, has not been received yet, which the company regards as its most “significant investment.”
Kraft would release earning statement on August 8, it’s first since it called out last year a more than $15 billion writedown on its Kraft and Oscar Mayer brands.
In May, Buffett said that Kraft not releasing any financial documents “very unusual” and indicated it could be due to a dispute the company was having with its auditor, PricewaterhouseCoopers.
Berkshire also reacquired about $442 million in stock last quarter, a steep decline from the $1.7 billion purchased in the first quarter.
Warren Buffet is one of the world’s most successful investors and recommends diversification in investing.
That’s the reason as of June 30, Berkshire had an $18.7 billion stake in equity securities in American Express,$27.6 billion in Bank of America, $50.5 billion in Apple, $20.4 billion in Coca-Cola and $20.5 billion in Wells Fargo.