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Why is Berkshire so Cheap?

The dry powder’s being put to use.

Andrew Willis 30 June, 2022 | 8:04AM
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Andrew Willis: For the past few years, there’s been much consternation about Berkshire (BRK.B)’s massive cash reserves which have been earning next to nothing in a low interest rate environment.

But Buffett’s plan may be starting to pay off. For one, his portfolio has lost less than half of what the index has lost so far this year, as of June 17th, all the while it looks like he’s starting to deploy some of that cash. In the recent quarter, Berkshire purchased about 40 billion U.S. dollars in equity securities, and in the last eight calendar quarters, the company has repurchased about 9.1% of its own Class A shares for around 52 billion dollars.

Sector strategist Greggory Warren believes the company has finally hit a nexus where it is more focused on reducing its cash hoard through investments and share repurchases. Perhaps the Oracle sees a light at the end of the tunnel on the market – and the patience of his investors is about to pay off…

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Berkshire Hathaway Inc Class A477,085.00 USD-0.67Rating
Berkshire Hathaway Inc Class B315.84 USD-0.87Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar.ca. He previously produced content for Fidelity Investments and finance events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @AndrewWillisCDN.

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