Berkshire Hathaway Launches Aggressive Buying After Buffett's Retirement... Abel’s Investment Strategy Begins

End of 14 Consecutive Quarters of Net Stock Selling
Cash Holdings Decline for the First Time in Four Years

Greg Abel, Chief Executive Officer (CEO) of Berkshire Hathaway. AP Yonhap News

Berkshire Hathaway (hereafter Berkshire) shifted from a net seller to a net buyer of stocks in the second quarter of this year, ending a trend of net stock selling that had lasted for over three years. This is being interpreted as the beginning of an independent investment strategy by Greg Abel, who became Chief Executive Officer (CEO) last January as Warren Buffett's successor. Abel has recently led a major shift in Berkshire's capital allocation strategy by substantially increasing investments in the artificial intelligence (AI) sector—an area where Chairman Buffett was reluctant to invest.

According to CNBC on the 9th (local time), Berkshire’s net stock purchases in the second quarter of this year amounted to $19.8 billion (approximately KRW 28 trillion). The company purchased $23.5 billion worth of stocks while selling $3.7 billion. This net buying halted Berkshire's streak of net stock selling that had continued for 14 consecutive quarters.

Berkshire's cash holdings, which Chairman Buffett had emphasized prior to his retirement, also decreased somewhat. As of the end of the second quarter, Berkshire's cash and short-term government bond holdings amounted to $364.7 billion, down about 4% from $380.2 billion in the first quarter. This marks the first decline in Berkshire's cash holdings in four years.

Among the shares acquired in the second quarter, Alphabet, the parent company of Google, stands out. Berkshire purchased over $10 billion worth of Alphabet shares in June, accounting for nearly half of its total stock purchases. Consequently, Alphabet has joined Apple, American Express, Coca-Cola, and Bank of America in Berkshire's top five holdings.

Prior to Buffett's retirement, Alphabet—the AI big tech leader—had not been one of Berkshire’s major holdings. This was mainly because Buffett did not have strong confidence in the AI sector and refrained from making large investments in it. Buffett had maintained, "I will not invest in technology that I don’t understand," distancing himself from leading AI big tech companies.

However, since CEO Abel took office last January, Berkshire’s investment in AI-related stocks has become more active. During his first shareholder meeting in early May, Abel indicated not only a willingness to invest indirectly, but also a possibility of direct involvement, stating, "We will not remain a company that merely purchases AI technology, but will transform into a company that builds the technology directly."

CEO Abel has not only expanded stock investments but has also ramped up Berkshire’s share repurchases. In the second quarter, Berkshire repurchased $4.53 billion worth of its own stock—a nearly 20-fold increase compared to the $234 million in the first quarter. In early June, Berkshire also acquired U.S. home builder Taylor Morrison Home for $6.8 billion. Through stock purchases, share repurchases, and corporate acquisitions, Abel is pursuing an aggressive investment strategy on multiple fronts.

This content was produced with the assistance of AI translation services.