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OMAHA, Neb. (AP) – Warren Buffett is now sitting on a fortune of more than $325 billion after continuing to sell shares in Apple and Bank of America worth billions of dollars this year and continuing to collect a string of profits from all of Berkshire Hathaway’s. various businesses without making any major acquisitions.
Berkshire said it sold about 100 million Apple shares in the third quarter after halving its largest investment in the iPhone maker last quarter. The remainder of the roughly 300 million shares valued at $69.9 billion at the end of September remains Berkshire’s largest single investment, but has fallen sharply from the end of last year when it was worth $174.3 billion.
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Investors will also be disappointed to learn that Berkshire did not repurchase any of its shares during the quarter.
CFRA Research analyst Cathy Seifert said shareholders will wonder why Buffett continues to accumulate so much money. “Are they more optimistic about the future economic and market picture than others are?” he said.
Buffett said at the annual meeting in May that part of the reason he started selling some of his Apple shares is that he expects tax rates to rise in the future. But Edward Jones analyst Jim Shanahan said he wonders if part of the reason why Buffett started selling Apple has to do with Charlie Munger’s death last year because sales started shortly after Munger’s death. Shanahan said Buffett was never as comfortable with tech businesses as his longtime partner was.
“If Charlie Munger were still alive, maybe he wouldn’t have sold this position so aggressively — maybe,” Shanahan said.
Berkshire said Saturday that investment gains also boosted its third-quarter profit to $26.25 billion, or $18,272 per Class A share. Last year, losses on unrealized paper investments dragged the Omaha, Nebraska-based conglomerate’s profit down to for a loss of 12.77 billion, or $8,824 per Class A share.
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Buffett has long recommended that investors pay close attention to Berkshire’s operating income if they want to get a good understanding of how the businesses it owns are doing because those numbers don’t include investments. Berkshire’s underlying earnings figures can vary greatly from quarter to quarter and the value of its investment regardless of whether the company buys or sells something.
At that rate, Berkshire said its operating income fell about 6% to $10.09 billion, or $7,023.01 per Class A share. That compares with $10.8 billion a year ago, or $7,437.15 per share. each of Class A.
Four analysts surveyed by FactSet Research forecast that Berkshire will report earnings of $7,335.11 per Class A share.
Berkshire’s net income was largely unchanged at $92.995 billion. Last year, it reported a revenue of 93.21 billion. That number was ahead of the $92.231 billion revenue forecast by three analysts surveyed by FactSet.
Berkshire has a variety of insurance businesses, including Geico, and the BNSF railroad, several major utilities and a diverse collection of retail and manufacturing businesses, including brands such as Dairy Queen and See’s Candy.
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One of Berkshire’s insurers, Guard, has reported more losses in recent years after management revised its policies.
Berkshire solved one mystery in the quarter by writing how much it paid to acquire more shares in its utilities business from former Berkshire board member Walter Scott.
Berkshire said it paid $2.4 billion in cash, paid off $600 million in debt and gave the Scott Class B Berkshire family shares worth just over $1 billion. So the total compensation was about four billion dollars. That means the Scott family didn’t get nearly as much cash for its 8 percent stake in utilities as when Berkshire Vice Chairman Greg Abel sold his 1 percent stake in the utilities business two years ago for $870 million.
Abel is expected to succeed Buffett, 94, as CEO in the event of his death.
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