Warren Buffett’s cash fortress Berkshire narrows the gap with the S&P 500 as AI concerns bring down Wall Street

(This is the Warren Buffett Watch newsletter, news and analysis about Warren Buffett and Berkshire Hathaway. Sign up here to receive it in your inbox every Friday night.)

Benchmark underperformance narrowed as Berkshire stock rose S&P500 It rose to 4.3 percentage points from 12.2 percentage points on October 29th.

In the third quarter, Berkshire’s wholly-owned company’s operating income increased 34% to approximately $13.5 billion, and underwriting income increased 200%.

Again, there were no share buybacks, indicating that Buffett doesn’t think Berkshire’s stock is significantly undervalued, despite its stock’s decline since May.

The company had $381.7 billion in cash as of Sept. 30, an increase of 10.9% since the end of June, as no funds were spent on buying back Berkshire stock and stock sales exceeded purchases.

After subtracting BNSF’s cash and taking into account the timing of certain Treasury bill purchases, the total amount was $354.3 billion, an increase of 4.3% from June.

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

The company confirmed in a news release this week what it told The Wall Street Journal last week.

“On Monday, November 10, Berkshire will issue a press release containing a message from Mr. Buffett about philanthropy, Berkshire, and other matters that may be of interest to Berkshire stockholders and others.”

The philanthropic part will likely involve an annual Thanksgiving donation to the family foundation.

The “Berkshire and other issues” section could be a farewell message for the company as he prepares to step down as CEO at the end of the year.

He will remain chairman of the board, but will not appear at next May’s general meeting, when new CEO Greg Abel will write the company’s annual letter to shareholders.

Buffett appears to be intentionally limiting his future opportunities to speak to shareholders and the rest of the world, so he may be ready to make the final call now.

We won’t know for sure until Berkshire’s Q3 stock portfolio snapshot is released next Friday, but it looks like Berkshire’s selling has increased even further. apple Number of shares for the three months ending September 30th.

CNBC.com’s Yun Lee noted that Berkshire’s 10th quarter results last Saturday reported a $1.2 billion decline in cost for consumer products stocks, including Apple.

He also noted that Apple’s 24% rise during the quarter would have provided Buffett with an opportunity to lock in more profits.

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

Barron’s estimates that the $1.2 billion at cost was down $35 per Apple share, and Berkshire could have sold 35 million shares for about $8 billion, based on Apple’s average price of $230 per share during the quarter.

Apple reported in the 10th quarter that it sold $12.4 billion in third-quarter stock sales, so Barron’s suggests that much of the remaining $4.4 billion could be sold. bank of america Revenue is another big position that Berkshire is cutting sharply.

Its investment has been reduced by about 40% since the beginning of last year.

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

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

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

That number could be even higher, assuming some of Berkshire’s continued purchases have not yet been made public.

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

“In general, while these video images of Mr. Buffett may look like Mr. Buffett, the voice of the impersonator, who speaks in a very flat, monotone voice, is clearly not Mr. Buffett’s voice,” Thursday’s news release said.

He added: “Mr. Buffett is concerned that these types of fraudulent videos have become viral. People who are not familiar with Mr. Buffett may be misled by the content of these videos, believing them to be genuine.”

In April, a Berkshire release cited unspecified “reports currently circulating on social media” about Buffett’s “purported comments” and said “all such reports are false.”

Buffett also warned shareholders at Berkshire’s 2024 annual meeting that AI’s ability to create fake audio and video could make fraud the “highest growth industry in history.”

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Warren Buffett explains why investors should treat stocks like they would own a farm or an apartment.

Warren Buffett: If you’re afraid of others when others are afraid, you’re probably not going to make a lot of money in securities over the long term.

You know, people really, even if they didn’t see the quote, but of course, the whole world is encouraged to see the quote, and more than that, to do something based on small changes in the quote.

But think about it. We’ve talked about this before, but think about how it makes more sense to invest in farms than the way most people buy stocks.

If I buy a farm, will I get a quote next week or next month? If I buy a condominium, will I get a quote next week or next month?

No, you look at that apartment complex or that farm and say, “It’s going to produce so many soybeans and corn, and if that happens, it will meet my expectations.”

They buy a stock and think it’s great if it goes up and bad if it goes down.

We think exactly the opposite. I love that because when it goes down, I buy more. And if it goes up, we don’t need to buy more.

And I, you know, all kinds of, Ben Graham wrote about it. It’s already explained. But if you don’t have that mindset yourself, you’ll end up getting scared whenever others are scared.

And things like regaining courage in the hopes that someone will tell me when to buy.

I was able to give this guy a lot of courage by saying that now is a great time to buy. Then, a week later, you’ll run into another person who tells you the world is coming to an end and they’re selling it.

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

Berkshire’s top public holdings by market value in the U.S., Japan, and Hong Kong, based on today’s closing prices.

Asset holdings are as of June 30, 2025, as reported in Berkshire Hathaway’s report filed with the 13th Floor on August 14, 2025. However, the following are excluded.

A complete list of holdings and current market value is available on CNBC.com’s Berkshire Hathaway Portfolio Tracker.

If you have any questions or comments about the newsletter, please send them to alex.crippen@nbcuni.com. (Sorry, we do not forward questions or comments to Mr. Buffett himself.)

If you haven’t subscribed to this newsletter yet, you can sign up here.

I also highly recommend Buffett’s annual letter to shareholders. It’s collected here on Berkshire’s website.

— Alex Crippen, Warren Buffett Watch Editor