According to the latest third quarter report released by Berkshire Hathaway, a subsidiary of Warren Buffett, as of September 30, 2024, Berkshire Hathaway's cash reserves reached a record high of $325.2 billion (approximately RMB 2.3 trillion), rising for nine consecutive quarters and increasing by approximately $220 billion compared to two years ago.
The significant increase in cash is mainly due to the sale of stocks. According to the financial report, Berkshire Hathaway sold approximately $36.1 billion worth of stocks in the third quarter, including around 100 million shares of Apple and several hundred million dollars of Bank of America stock, marking the eighth consecutive quarter of net stock sales for Berkshire Hathaway.
Against the backdrop of continuous portfolio reductions, even though the S&P 500 index has risen by over 26% since the second quarter of 2022, Berkshire Hathaway's fair value financial assets (mainly stock holdings) have fallen by nearly $120 billion compared to their peak two years ago. Under the balance of gains and losses, Berkshire Hathaway's cash reserves have surpassed its stock holdings.
It is worth noting that Buffett significantly reduced his holdings in US stocks in 1969, 1987, 1999, and 2007, and after these four reductions, the US stock market experienced a sharp decline. The most recent time was in 2007, when Buffett significantly reduced his holdings in the US stock market before the global financial crisis. From November 2007 to March 2009, both Nasdaq and S&P 500 plummeted by over 50%. Afterwards, Buffett successfully bought the bottom of the US stock market and became the world's richest person for the first time in 2008.