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

(This is the Warren Buffett Watch newsletter, news and analysis on all things Warren Buffett and Berkshire Hathaway. You can sign up here to receive it every Friday evening in your inbox.)

The upturn for Berkshire shares has cut its underperformance versus the benchmark S&P 500 to 4.3 percentage points from 12.2 percentage points on October 29.

Operating profits for Berkshire’s wholly owned companies were up 34% to almost $13.5 billion in the third quarter, with a 200% increase for insurance underwriting income.

There were again no stock buybacks, a sign Buffett does not think Berkshire shares are significantly undervalued despite their weakness since May.

With no money spent on buying back Berkshire shares and equity sales outpacing purchases, the company’s September 30 cash hit $381.7 billion, up 10.9% since the end of June.

If you subtract BNSF’s cash and account for the timing of some Treasury bill purchases, the total is $354.3 billion, up 4.3% from June.

Warren Buffett may be delivering his final message as Berkshire’s CEO next Monday.

This week the company confirmed in a news release what it told the Wall Street Journal last week.

“On Monday, November 10th, Berkshire will be issuing a press release which will contain a message from Mr. Buffett regarding philanthropy, Berkshire and other matters that Berkshire shareholders and others may find to be of interest.”

The philanthropy part will probably be connected to his annual Thanksgiving contributions to family foundations.

The “Berkshire and other matters” portion could be something of a farewell message as he prepares to step down as CEO at the end of the year.

While he will remain chairman of the board, he will not be on stage at next May’s meeting and new CEO Greg Abel will be writing the annual letter to shareholders.

Since he appears to be intentionally limiting his future opportunities to speak to shareholders and the rest of the world, Buffett may be ready to have his final say now.

We won’t know for sure until next Friday’s release of Berkshire’s Q3 equity portfolio snapshot, but it looks like there were more sales of Apple shares during the three months ending September 30.

CNBC.com’s Yun Li notes Berkshire’s 10-Q last Saturday reported a $1.2 billion decline in its cost basis for consumer product stocks, which would include Apple.

She also points out that Apple’s 24% gain during the quarter would have provided an opportunity for Buffett to lock in more profits.

Apple remains Berkshire’s largest equity holding, currently valued at $75.2 billion, but it has cut the position by 69% over the past two years.

Barron’s divides that $1.2 billion cost basis drop by $35, Apple’s per-share basis, to estimate Berkshire may have sold 35 million shares for around $8 billion, based on Apple’s average price of $230 per share during the quarter.

With Apple reporting in its 10-Q that it had $12.4 billion in Q3 equity sales, Barron’s suggests a lot of the remaining $4.4 billion may be Bank of America sales, another big position that Berkshire has been sharply reducing.

That stake has been cut by around 40% since the beginning of last year.

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

All five of the stocks are at or near all-time highs.

The combined value of Berkshire’s reported holdings is approaching $33 billion, up from $31 billion just one month ago.

The figure could be even higher assuming some of Berkshire’s continued buying has not yet been publicly revealed.

Berkshire Hathaway has a new warning about YouTube videos with “images or AI created images impersonating” Warren Buffett.

A news release Thursday said, “Generally, such video images of Mr. Buffett may appear to look like him but the sound of the impersonator speaking in a very flat monotone voice is clearly not the voice of Mr. Buffett.”

It added, “Mr. Buffett is concerned that these types of fraudulent videos are becoming a spreading virus. Individuals who are less familiar with Mr. Buffett may believe these videos are real and be misled by the contents of these videos.”

In April, a Berkshire release cited unspecified “reports currently circulating on social media” about “comments allegedly made” by Buffett and said, “All such reports are false.”

Buffett also warned shareholders at the 2024 Berkshire annual meeting that AI’s ability to create fake audio and video could make scamming “the growth industry of all time.”

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Warren Buffett explains why investors should look at their stocks the same way they would look at owning a farm or an apartment.

WARREN BUFFETT: If you have a temperament that when others are fearful, you’re going to get scared yourself, you know, you are not going to make a lot of money in securities over time, in all probability.

You know, people really — if they didn’t look at quotations — but of course, the whole world is urging them to look at quotations, and more than that, do something based on small changes in quotations.

But think how much more rational — we’ve talked about it before — but think how much more rational investing in a farm is than the way many people buy stocks.

If you buy a farm, do you get a quote next week, do you get a quote next month? If you buy an apartment house, do you get a quote next week or month?

No, you look at the apartment house or the farm, and you say, “I expect it to produce so many bushels of soybeans and corn, and if it does that, it meets my expectations.”

If they buy a stock and they think if it goes up it’s wonderful, and if it goes down it’s bad.

We think just the opposite. When it goes down, we love it, because we’ll buy more. And if it goes up, it kills us to buy more.

And I — you know — all kinds — you know, Ben Graham wrote about it. It’s been explained. But if you can’t get yourself in that mental attitude, you’re going to be scared whenever everybody else is scared.

And to expect somebody else to tell you when to buy and therefore get your courage back up or something, you know —

I could get this fellow’s courage up substantially by saying this is a wonderful time to buy, and then a week from now he’d run into somebody else that tells him the world is coming to an end and he’d sell.

I mean, he’s a broker’s friend, but he’s not going to make a lot of money.

Berkshire’s top holdings of disclosed publicly traded stocks in the U.S., Japan, and Hong Kong, by market value, based on today’s closing prices.

Holdings are as of June 30, 2025 as reported in Berkshire Hathaway’s 13F filing on August 14, 2025, except for:

The full list of holdings and current market values is available from CNBC.com’s Berkshire Hathaway Portfolio Tracker.

Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don’t forward questions or comments to Buffett himself.)

If you aren’t already subscribed to this newsletter, you can sign up here.

Also, Buffett’s annual letters to shareholders are highly recommended reading. There are collected here on Berkshire’s website.

— Alex Crippen, Editor, Warren Buffett Watch