Warren Buffett’s cash fortress Berkshire closes gap with S&P 500 as AI worries depress Wall Street

(That is the Warren Buffett Watch e-newsletter, information and evaluation on all issues Warren Buffett and Berkshire Hathaway. You’ll be able to enroll right here to obtain it each Friday night in your inbox.)

The upturn for Berkshire shares has reduce its underperformance versus the benchmark S&P 500 to 4.3 proportion factors from 12.2 proportion factors on October 29.

Working earnings for Berkshire’s wholly owned corporations have been up 34% to nearly $13.5 billion within the third quarter, with a 200% enhance for insurance coverage underwriting earnings.

There have been once more no inventory buybacks, an indication Buffett doesn’t assume Berkshire shares are considerably undervalued regardless of their weak point since Could.

With no cash spent on shopping for again Berkshire shares and fairness gross sales outpacing purchases, the corporate’s September 30 money hit $381.7 billion, up 10.9% for the reason that finish of June.

In the event you subtract BNSF’s money and account for the timing of some Treasury invoice purchases, the whole is $354.3 billion, up 4.3% from June.

Warren Buffett could also be delivering his closing message as Berkshire’s CEO subsequent Monday.

This week the corporate confirmed in a information launch what it instructed the Wall Road Journal final week.

“On Monday, November tenth, Berkshire will likely be issuing a press launch which will comprise a message from Mr. Buffett relating to philanthropy, Berkshire and different issues that Berkshire shareholders and others could discover to be of curiosity.”

The philanthropy half will in all probability be linked to his annual Thanksgiving contributions to household foundations.

The “Berkshire and different issues” portion may very well be one thing of a farewell message as he prepares to step down as CEO on the finish of the yr.

Whereas he’ll stay chairman of the board, he is not going to be on stage at subsequent Could’s assembly and new CEO Greg Abel will likely be writing the annual letter to shareholders.

Since he seems to be deliberately limiting his future alternatives to talk to shareholders and the remainder of the world, Buffett could also be able to have his closing say now.

We can’t know for positive till subsequent Friday’s launch of Berkshire’s Q3 fairness portfolio snapshot, however it appears like there have been extra gross sales of Apple shares through the three months ending September 30.

CNBC.com’s Yun Li notes Berkshire’s 10-Q final Saturday reported a $1.2 billion decline in its price foundation for shopper product shares, which would come with Apple.

She additionally factors out that Apple’s 24% acquire through the quarter would have offered a chance for Buffett to lock in additional earnings.

Apple stays Berkshire’s largest fairness holding, at the moment valued at $75.2 billion, however it has reduce the place by 69% over the previous two years.

Barron’s divides that $1.2 billion price foundation drop by $35, Apple’s per-share foundation, to estimate Berkshire could have offered 35 million shares for round $8 billion, based mostly on Apple’s common value of $230 per share through the quarter.

With Apple reporting in its 10-Q that it had $12.4 billion in Q3 fairness gross sales, Barron’s suggests quite a lot of the remaining $4.4 billion could also be Financial institution of America gross sales, one other large place that Berkshire has been sharply lowering.

That stake has been reduce by round 40% for the reason that starting of final yr.

At $32.2 billion, it’s Berkshire’s third largest fairness holding.

All 5 of the shares are at or close to all-time highs.

The mixed worth of Berkshire’s reported holdings is approaching $33 billion, up from $31 billion only one month in the past.

The determine may very well be even greater assuming a few of Berkshire’s continued shopping for has not but been publicly revealed.

Berkshire Hathaway has a brand new warning about YouTube movies with “photos or AI created photos impersonating” Warren Buffett.

A information launch Thursday mentioned, “Typically, such video photos of Mr. Buffett could seem to appear to be him however the sound of the impersonator talking in a really flat monotone voice is clearly not the voice of Mr. Buffett.”

It added, “Mr. Buffett is worried that all these fraudulent movies have gotten a spreading virus. People who’re much less accustomed to Mr. Buffett could imagine these movies are actual and be misled by the contents of those movies.”

In April, a Berkshire launch cited unspecified “stories at the moment circulating on social media” about “feedback allegedly made” by Buffett and mentioned, “All such stories are false.”

Buffett additionally warned shareholders on the 2024 Berkshire annual assembly that AI’s capability to create faux audio and video may make scamming “the expansion business of all time.”

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Warren Buffett explains why buyers ought to have a look at their shares the identical manner they’d have a look at proudly owning a farm or an condo.

WARREN BUFFETT: You probably have a temperament that when others are fearful, you are going to get scared your self, , you aren’t going to make some huge cash in securities over time, most likely.

You recognize, folks actually — in the event that they did not have a look at quotations — however in fact, the entire world is urging them to take a look at quotations, and greater than that, do one thing based mostly on small modifications in quotations.

However assume how rather more rational — we have talked about it earlier than — however assume how rather more rational investing in a farm is than the way in which many individuals purchase shares.

In the event you purchase a farm, do you get a quote subsequent week, do you get a quote subsequent month? In the event you purchase an condo home, do you get a quote subsequent week or month?

No, you have a look at the condo home or the farm, and also you say, “I count on it to provide so many bushels of soybeans and corn, and if it does that, it meets my expectations.”

In the event that they purchase a inventory they usually assume if it goes up it is great, and if it goes down it is dangerous.

We expect simply the other. When it goes down, we find it irresistible, as a result of we’ll purchase extra. And if it goes up, it kills us to purchase extra.

And I — — every kind — , Ben Graham wrote about it. It has been defined. However if you cannot get your self in that psychological perspective, you are going to be scared each time everyone else is scared.

And to count on any person else to inform you when to purchase and due to this fact get your braveness again up or one thing, —

I may get this fellow’s braveness up considerably by saying it is a great time to purchase, after which per week from now he’d run into any person else that tells him the world is coming to an finish and he’d promote.

I imply, he is a dealer’s pal, however he is not going to make some huge cash.

Berkshire’s high holdings of disclosed publicly traded shares within the U.S., Japan, and Hong Kong, by market worth, based mostly on as we speak’s closing costs.

Holdings are as of June 30, 2025 as reported in Berkshire Hathaway’s 13F submitting on August 14, 2025, aside from:

The complete checklist of holdings and present market values is on the market from CNBC.com’s Berkshire Hathaway Portfolio Tracker.

Please ship any questions or feedback in regards to the e-newsletter to me at alex.crippen@nbcuni.com. (Sorry, however we do not ahead questions or feedback to Buffett himself.)

In the event you aren’t already subscribed to this text, you may enroll right here.

Additionally, Buffett’s annual letters to shareholders are extremely really helpful studying. There are collected right here on Berkshire’s web site.

— Alex Crippen, Editor, Warren Buffett Watch