Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Warren Buffett’s Berkshire Hathaway Inc. (BRK.A) Will Wait for a Fat Pitch for Its $50 Bln Cash

Berkshire Hathaway Inc. (NYSE:BRK.A) reported a record breaking second quarter on Friday as its profits jumped by as much as 41% indicating an impressive track record of the company’s investments. Berkshire Hathaway Inc. (NYSE:BRK.A)’s net earnings grew to $3.89 billion in the second quarter of 2014, from $2.76 billion a year earlier. However, a figure that gripped the Wall Street’s eyes is the company’s big amount of cash that surpassed the level of $50 billion, an all time high on an absolute basis. Bloomberg discussed with experts as how the company will deal with its huge cash pile.

Berkshire Hathaway

“It is really just about 10% of Berkshire Hathaway Inc. (NYSE:BRK.A)’s assets, which is actually down from a decade ago. Because  what Warren Buffett has been doing is that he has been buying railroads, he has been buying electric utilities. That has really expanded the size of the balance sheet, but it has also expanded the earnings power of Berkshire Hathaway Inc. (NYSE:BRK.A). So what you are seeing is every quarter, Berkshire Hathaway Inc. (NYSE:BRK.A) is just generating a lot of money and Buffet, as we all know, sort of waits for the fat pitch. He really wants a good investment,” said Noah Buhayar.

So far, Buffet has not made any comment about how the cash would be utilized in investing. However, when it comes to a potential transaction, Buffet has the courage to decide when to say ‘No.’

“Clearly, he has no problem saying no because so many people are trying to get him interested in investments,” added Buhayar.

Meanwhile, Bank of America Merrill Lynch Portfolio Strategy’s CIO, Mary Ann Bartels, sees the M&A cycles as fat pitches. “[…] We are very bullish on the M&A cycle. It has picked up, the number of deals is very high, but if look at the dollar volume, then we are still way below 2007,” which is a very positive thing in her opinion. But, retail is nowhere in the list, considers Davidowitz & Associates Chairman and founder, Howard Davidowitz, as he said,” he hates retail. It is 2% of the business. He says it’s in trouble.”

Disclosure None

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading...