Another Weekend At Berkshire’s

Berkshire’s annual shareholder meeting was this weekend, which meant CNBC’s website looked a lot like a British tabloid, only instead of images depicting an elaborate costume party complete with holy oil, a scepter and cries of “God Save the King!”, visuals showed an elaborate flea market complete with plush toys, walnut fudge and, one imagines, cries of “God bless capitalism!”

The monarchy didn’t release a quarterly report today, but Berkshire did and Warren Buffett’s cash pile rose to nearly $131 billion, up more than $2 billion from the end of 2022, and equal to roughly 4.3 Royal Families.

Berkshire’s cash and equivalents counts T-Bills with maturities of three months or less, and there’s a separate line item (always included in calculations of the conglomerate’s total cash pile) specifically for all Bills. That line rose 12% YoY to $104 billion. Bills, you’re reminded, are now paying the most in at least 15 years, and in some cases the most in nearly a quarter century.

As a reminder, Berkshire had nearly $150 billion in cash at one point in 2021, and eventually deployed more than $40 billion early last year, to the relief of shareholders who feared Buffett and Charlie Munger might’ve become complacent.

As Buffett put it in this year’s annual letter, “Berkshire will always hold a boatload of cash and US Treasury bills” in order to, among other things, avoid “any uncomfortable cash needs at inconvenient times, including financial panics and unprecedented insurance losses.”

Buybacks more than doubled in Q1 to $4.439 billion, the most since Q4 2021.

Berkshire repurchased “boatloads” (as Buffett might put it) of its own stock in 2020 and 2021, before backing off a bit last year.

In the annual letter, released in February and discussed at some length here, Buffett chided investment bankers for encouraging buybacks at prices that aren’t accretive, but he reserved his most barbed criticism for politicians.

“When you are told that all repurchases are harmful to shareholders or to the country, or particularly beneficial to CEOs, you are listening to either an economic illiterate or a silver-tongued demagogue,” he said, adding that those “characters” aren’t “mutually exclusive.” Berkshire was a net seller of other stocks for the second straight quarter in Q1.

Operating income was $8.07 billion. That was ahead of the $7.33 billion consensus expected, although “consensus,” “beats” and “misses” are largely irrelevant here. GEICO returned to profitability after a half-dozen quarterly losses.

Illustrating the disaggregated breakdown is now complicated by several factors. Pilot’s results are now consolidated, BNSF and Berkshire Hathaway Energy are their own line items and insurance underwriting earnings were revised following the adoption of updated FASB reporting guidelines. There’s no point in trying to visualize that. Berkshire did fine in Q1.

With the formalities out of the way, Buffett and Munger played the hits in Omaha, where everyone overdosed on junk food and folk wisdom. God bless capitalism!