Warren Buffett’s faith in himself didn’t wane in the third quarter.
After repurchasing more than $5 billion of Berkshire shares during Q2, Buffett got super high on his own supply during Q3, buying back $9 billion more of his own stock.
Q2’s repurchases were (easily) a record for any quarter. Q3’s total was a record for any full year. That is: Berkshire bought back more of its own shares last quarter than the conglomerate has ever repurchased during a calendar year.
The buyback total for 2020 is now approaching $16 billion. After woefully underperforming the S&P during the second quarter, when stocks surged alongside tech heavyweights, Berkshire’s shares bested the broader market by a hefty margin last quarter.
Net income rose 82% YoY thanks to investment gains. That builds on Q2’s massive rebound, which came on the heels of a Nebraska-sized paper loss logged during the first three months of 2020, when Buffett’s colossal stock portfolio suffered mightily amid the pandemic panic.
Operating income, Buffett’s preferred measure of performance, fell 30% YoY to $5.48 billion last quarter.
It looks as though Berkshire posted a rather large underwriting loss of $213 million in the period. Operating earnings at Buffett’s railroad, utilities and energy businesses rose nearly 4% YoY, while the insurance float last quarter was up 6.3%.
Buffett’s cash hoard dropped slightly to $145.7 billion. Recall that it surged more than $9 billion for two consecutive quarters in Q1 and Q2, as Buffett disposed of stakes in airline shares, among other activities.
Berkshire recently took a $6 billion stake in five Japanese trading houses. Buffett said at the time the conglomerate intends to hold the positions (described in a press release as “slightly more than 5%”) for the “long term.”
Those are the only major moves Berkshire made in 2020 — unless you count the buybacks.