Berkshire's Cash Could Exceed $200 Billion

Omaha-based conglomerate Berkshire Hathaway is anticipated to announce a record cash reserve exceeding $200 billion when it reports its second-quarter earnings this Saturday. This follows a previous record of $189 billion set in the first quarter. The announcement comes as CEO Warren Buffett has been strategically offloading significant investments in major companies like Apple, Bank of America, and BYD, raising speculation about his outlook on the current bull market. Buffett's recent sell-offs, particularly in economically sensitive sectors such as banking, suggest a cautious approach as he navigates what some analysts perceive as an overheated market. The decision to reduce holdings in Bank of America, Berkshire's second-largest investment, has drawn attention, especially as Apple shares surged by 23% during the same quarter. This trend indicates a potential shift in Buffett's investment strategy, as he appears to be taking a contrarian stance amidst widespread market optimism. Despite holding substantial cash reserves, Buffett has expressed hesitance to invest unless opportunities present minimal risk and substantial returns. He noted at Berkshire's annual meeting that while he is eager to deploy capital, high valuations are a significant deterrent. With interest rates expected to decline, the potential returns on cash investments, such as Treasury bills, may diminish, further complicating investment decisions. Investors will also be keenly observing the performance of Berkshire's subsidiaries, including BNSF Railway and Berkshire Hathaway Energy, which have recently shown signs of weakness, adding another layer of scrutiny to the upcoming earnings report.