Berkshire Hathaway at All-Time High with $128 Billion in Cash

Berkshire Hathaway hit an all-time high Thursday of 339,769.60. That tops the previous high set in the fall of 2018. It closed Friday at 338,080. The current market value of the company is more than $552 billion. Its Class B shares also hit a new high of 226.52.

I disagree with those who argue that Berkshire has too much cash on its balance sheet.  Although Berkshire has underperformed the S&P 500 in 2019, its performance over the past four years has closely matched that benchmark. Berkshire will consider acquiring a privately owned, or a publicly traded, company only if it is well managed, its management agrees to stay in place, and it is offered at the right price. What distinguishes Warren Buffett from others is both his skills as a CEO as well as a portfolio manager. His patience permitted Berkshire to be the investor of last resort during the Great Recession, resulting in lucrative investments in several companies including Goldman Sachs (2008) and Bank of America (2011).  Although the current record economic expansion has exceeded 10 years and a recession in 2020 is unlikely, the economic cycle has not been repealed. Eventually the economy will experience another recession. Buffett’s war chest of over $100 billion could then be deployed at very attractive prices.  Perhaps Buffett’s most attractive purchase at that time would be a large buyback of the shares of Berkshire Hathaway.