Warren Buffett’s conglomerate, Berkshire Hathaway, is likely to report a record cash hoard of over $200 billion when it releases its second-quarter earnings on Saturday morning. This surpasses the previous record of $189 billion set in the first quarter.
The significant cash reserve has raised questions about Buffett’s investment strategy, particularly given his recent sale of some of his favorite stocks, including Apple, Bank of America, and BYD. Some analysts believe that Buffett thinks the bull market is overheated and is taking a contrarian view by de-risking his portfolio.
Berkshire’s cash pile has been earning substantial returns due to the increase in Treasury yields over the past two years. However, with interest rates expected to decline, the returns on this cash are likely to decrease.
The company’s earnings report will also provide insight into the performance of its non-insurance businesses, including BNSF Railway and Berkshire Hathaway Energy, which have shown signs of weakness. Conversely, Berkshire’s insurance business has been a bright spot, with a significant increase in insurance underwriting earnings in the first quarter.
Berkshire Hathaway’s market capitalization has grown to $956 billion, making it one of the largest companies in the US. The company’s shares have rallied over 21% this year, outperforming the S&P 500.
Investors will closely watch Berkshire’s earnings report for guidance on Buffett’s investment strategy and the company’s future plans for its significant cash reserve.