Berkshire Hathaway Has a Big Cash 'Problem'

Most folks would never think of cash as a problem... But in a climbing market, it is. [Chaikin PowerFeed]( Berkshire Hathaway Has a Big Cash 'Problem' By Marc Chaikin, founder, Chaikin Analytics Most folks would never think of cash as a problem... But in a climbing market, it is. That's especially true for asset managers. They don't get paid to sit on piles of cash. They're supposed to put that money to work. But right now, the legendary Warren Buffett's Berkshire Hathaway (BRK-B) has a cash problem. Put simply, the company is sitting on a massive pile of it. Now, Berkshire can be more patient than most companies – since it's investing its own money. But after some big selling in recent quarters, the company's cash position is getting large. As of the end of the second quarter, Berkshire was sitting on roughly $277 billion in cash. That's the highest cash position in the company's history. To put that number in perspective, only 27 companies in the S&P 500 Index have a market cap greater than $277 billion. In other words, Berkshire has enough cash to buy any of the other 473 companies in the index. It's a mind-boggling amount of cash. And there's a simple reason Berkshire's cash pile has surged... Recommended Links: [TONIGHT at 8 p.m. Eastern Time: The Harris-Trump Prediction Goes Live]( Tonight, the man who called the 2020 and 2022 crashes explains why a surprising upcoming twist to the Harris-Trump election could double your money 10 different times – as he showed during the 2020 election year. Tonight, we're going live with his terrifying blueprint of exactly where stocks could go next and why it could be "lights out" for one of the candidates. [Click here to learn more](. [Read This BEFORE Nvidia's Earnings Tomorrow...]( Nvidia's stock is up 30% in anticipation of its earnings report tomorrow. But there's ONE thing CEO Jensen Huang likely won't mention. It has to do with three under-the-radar companies with exposure to Nvidia's new Blackwell chip technology... whose stock could skyrocket in the months ahead. [See this before tomorrow's earnings report](. The company has been selling big chunks of its position in tech titan Apple (AAPL). It has also been trimming other holdings. During the first half of this year, Berkshire sold more than 500 million shares of Apple. That worked out to roughly 56% of its position at the start of 2024. At current prices, that's about $114 billion worth of Apple stock. After accounting for its buying, Berkshire ended up with $75.5 billion in new cash from stock sales last quarter. As you can see in the chart below, the company's cash position is staggering... The takeaway is simple... Berkshire's money needs to go somewhere. And it hasn't seen many attractive stocks to buy recently. It only added two new names to its portfolio last quarter. Berkshire bought a stake in cosmetics company Ulta Beauty (ULTA) worth roughly $266 million as of the end of the second quarter. And it opened a position in Heico (HEI), a midsized aerospace supplier. As of the end of June, that position was worth $185 million. It also added to its existing positions in oil and gas firm Occidental Petroleum (OXY) and satellite-radio company Sirius XM (SIRI). But otherwise, there haven't been signs that Buffett has seen major bargains in the stock market. But as regular Chaikin PowerFeed readers know... [the S&P 500 has recently moved back into "bullish" territory in the Power Gauge](. And this broad-market index is on the edge of making new highs again. So, there's no question that Berkshire will need to allocate cash eventually. An asset manager can't simply sit on the sidelines and let a strong market pass it by. And don't let the market pass you by, either... As I said, the Power Gauge is "bullish" on the S&P 500 right now. That means our system sees upside ahead for stocks. So if you're sitting on the sidelines with cash, don't miss out on the market's next leg higher. Good investing, Marc Chaikin Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 +0.22% 9 17 4 S&P 500 -0.25% 155 277 58 Nasdaq -0.96% 20 63 16 Small Caps +0.02% 629 976 322 Bonds -0.25% — According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks are Bullish. Major indexes are mixed. * * * * Sector Tracker Sector movement over the last 5 days Real Estate +2.92% Materials +2.35% Staples +2.03% Utilities +1.31% Financial +1.27% Industrials +1.1% Health Care +1.02% Discretionary +0.58% Communication +0.53% Energy +0.16% Information Technology -1.73% * * * * Industry Focus Software & Services 19 87 29 Over the past 6 months, the Software & Services subsector (XSW) has underperformed the S&P 500 by -7.10%. Its Power Bar ratio, which measures future potential, is Weak, with more Bearish than Bullish stocks. It is currently ranked #17 of 21 subsectors and has moved up 2 slots over the past week. Indicative Stocks [rating] ALTR Altair Engineering I [rating] MSTR MicroStrategy Incorp [rating] NN NextNav Inc. * * * * Top Movers Gainers [rating] DAY +3.96% [rating] JKHY +2.56% [rating] EOG +2.49% [rating] WBD +2.24% [rating] XEL +2.23% Losers [rating] SMCI -8.27% [rating] AVGO -4.05% [rating] MU -3.83% [rating] LRCX -3.36% [rating] TSLA -3.23% * * * * Earnings Report Reporting Today Rating Before Open After Close AZO, BBY JWN, NCNO, PVH, S No earnings reporting today. Earnings Surprises [rating] HEI HEICO Corporation Q3 $0.97 Beat by $0.05 * * * * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, [click here](. You’re receiving this e-mail at {EMAIL}. 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