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Berkshire Hathaway (BRK.A.US, BRK.B.US) (hereinafter referred to as "Berkshire"), owned by "Oracle of Omaha" Buffett, set a new record in cash reserves in the second quarter.

On the evening of August 3rd, Beijing time, Berkshire released its second quarter report for 2024. According to the financial report, Berkshire's revenue in the second quarter of 2024 was US$93.653 billion, the market expected US$91.09 billion, and the same period last year was US$92.503 billion, a year-on-year increase of 1.24%; net profit was US$30.348 billion, far exceeding the market expectation of US$17.786 billion, and the same period last year was US$35.912 billion, a year-on-year decrease of 15.49%; operating income in the second quarter rose to US$11.598 billion.

Berkshire's cash reserves hit a record high of $276.9 billion in the second quarter, compared with $189 billion at the end of the first quarter.

Specifically, Berkshire sold about $75.5 billion in net stock in the second quarter. At the same time, Berkshire repurchased only $345 million in the second quarter, far less than the $2.6 billion in common stock Berkshire repurchased in the first quarter.

At the 2024 annual shareholders meeting, Buffett said that by the end of the second quarter of this year, Berkshire's cash holdings may further increase to the $200 billion mark: "We are happy to spend money, but it must be (the acquired or invested business) that is doing something with little risk and can make a lot of money for us."

Buffett believes that holding a large amount of cash is "quite attractive" relative to the funds available in the stock market and conflicts around the world.

In terms of holdings, the financial report shows that as of June 30, 2024, 72% of the total fair value of Berkshire's equity investments was concentrated in American Express, Apple, Bank of America, Coca-Cola and Chevron, with shareholding values ​​of US$35.1 billion, US$84.2 billion, US$41.1 billion, US$25.5 billion and US$18.6 billion, respectively.

In terms of specific adjustments, Buffett sold off a large amount of his shares in Apple in the second quarter. The company reduced its holdings of Apple shares from 789 million shares in the first quarter to about 400 million shares in the second quarter, a decrease of 49.3%; Berkshire's Apple shares are worth $84.2 billion, a 51.69% decrease from $174.3 billion at the end of the first quarter. Currently, Berkshire holds about 2.6% of Apple's shares, which is worth $87.944 billion based on Friday's closing price of $219.86.

After the U.S. stock market closed on August 1, local time, Apple released its third-quarter financial report for fiscal year 2024 ending June 29. The financial report shows that Apple achieved revenue of US$85.777 billion this quarter, a year-on-year increase of 4.9%, higher than analysts' expectations of US$84.46 billion; non-GAAP net profit was US$21.448 billion, a year-on-year increase of 7.9%; diluted earnings per share (EPS) was US$1.40, a year-on-year increase of 11%, higher than the market expectation of US$1.35.

However, Apple's third-quarter performance in Greater China was disappointing, with revenue down 6.5% year-on-year to $14.73 billion, below analysts' expectations of $15.26 billion.

Berkshire Hathaway sold 13% of its Apple stake in the first quarter, and hinted at the Berkshire Hathaway annual meeting in May that this was for tax reasons. Buffett noted that if the U.S. government wants to make up for the rising fiscal deficit and raise capital gains taxes, then "selling a small amount of Apple" this year will benefit Berkshire Hathaway shareholders in the long run.

Buffett's reduction of Apple shares was not surprising, but the scale of the reduction was unexpected. Some Berkshire watchers had expected this reduction because once Buffett starts to reduce his holdings, he usually continues to reduce his holdings in large quantities. The outside world expected the reduction to reach about 100 million shares.

However, at the annual meeting in May, when asked whether he thought Apple's investment appeal had declined compared to 2016, Buffett replied that Berkshire still holds a lot of Apple shares at the end of 2023 and is likely to be the largest holder of Apple common stock. "We believe that holding it is not just holding stocks, but treating it as a business, just like Coca-Cola and American Express."

In addition to its top holding Apple, Berkshire is also continuously selling its second largest holding, Bank of America. Since mid-July, Berkshire has sold more than $3.8 billion worth of Bank of America.

According to the documents disclosed by the U.S. Securities and Exchange Commission on the evening of August 1, Berkshire has sold Bank of America shares for 12 consecutive trading days, with a total reduction of 90 million shares and a total cash out of $3.8 billion. Berkshire still holds 942 million shares of Bank of America and is still the largest shareholder of Bank of America. Based on the closing price of $39.50 on August 1, the value is $37.209 billion.