> Warren Buffett Blog: Berkshire does a Stock Buyback

Saturday, November 14, 2020

Berkshire does a Stock Buyback

Berkshire reported share buybacks of about $9 billion, a total that exceeds any full-year amount in Berkshire's history. The Q3 repurchases were also a big jump from the $5.1 billion in Q2 2020. At the time, that was more than double the prior quarterly record of $2.2 billion in Q4 2019 and a shift from slower stock repurchases of $1.7 billion in Q1.

Berkshire loosened rules for Buffett to buy back shares in 2018. With Berkshire steadfastly cautious on M&A in recent years, investors have been clamoring for more repurchases.

But as recently as May, Buffett argued repurchases weren't more attractive than other money moves, saying the stock price had not fallen to "where it really feels way better to us than other things, including the option value of money, to step up in a big, big way."

Now, the latest buybacks cement a major reversal in Buffett's investment strategy, which previously shunned hefty repurchases. Year to date, Berkshire Hathaway has bought back $16 billion in stock.

Meanwhile, Berkshire Hathaway was a net buyer of other stocks, adding $4.8 billion to its closely watched portfolio. That followed Q2's $13 billion in stock sales, the most in more than a decade, as Buffett cashed out all his airline stocks.

With the surge in buybacks and other stock purchases, Berkshire's cash pile dipped to $145.7 billion from a record high of $146.6 billion in Q2.