Warren Buffett’s Berkshire Hathaway dramatically slowed its pace of new investment in the second quarter after posting a blistering pace earlier in the year when a sell-off in the U.S. stock market pushed the insurance-to-railway conglomerate to a $43.8 billion loss. USD depressed the three months to June.
Berkshire said on Saturday the decline in global financial markets has weighed heavily on its stock portfolio, which has fallen in value to $328 billion from $391 billion at the end of March. The posted loss of $53 billion far outweighed a positive quarter for its companies that improved profitability.
The company’s filing with US securities regulators showed its purchases of new shares during the quarter at about $6.2 billion. Berkshire has sold $2.3 billion worth of stock over the past three months.
Berkshire also spent $1 billion buying back its own stock in June, a common tactic used when Buffett and his investment team find less attractive targets in the market.
The 91-year-old investor signaled at the company’s annual meeting in Omaha in April that the billion-dollar stock-buying spree was likely to slow over the course of the year, saying the atmosphere at the company’s headquarters had become “more lethargic.”
Investors will get a more detailed update on how Berkshire’s stock portfolio has changed later this month when the company and other big money managers disclose their investments to regulators. Separate filings show that the company has increased its stake in energy company Occidental Petroleum in recent months.
The quarter’s investments meant Berkshire’s mammoth cash and treasury holdings were little changed since late March, falling less than $1 billion to $105.4 billion.
While net income slipped to a loss of $43.8 billion from a profit of $5.5 billion at the start of the year, operating income — which excludes the ups and downs of Berkshire’s stock positions — rose 39 percent to 9, $3 billion.
Berkshire is required to include fluctuations in the value of its stock and derivatives portfolio each quarter as part of its earnings, an accounting rule Buffett has warned about can make the company’s earnings numbers appear “extremely misleading.”