November 4 - Warren Buffett's third quarter performance has climbed to a new peak in many aspects.
First, Berkshire's operating profit hit a record high, thanks to record profits from his biggest acquisition to date, BNSF rail. His stock investment profits have brought the group's net profit to an astonishing $52 billion in 2019, making it the world's most profitable listed company.
Second, the legendary investor now has $128 billion in cash to invest, more than ever before. But it is this record that has sent Berkshire's share price lower, and investors are trying to figure out the question: what's going to happen next?
'Berkshire's wealth is a bit embarrassing,' Cathy Seifert, an analyst at CFRA research, said in an interview. 'with this cash in hand, they may be eager to spend it. For them, the prudent approach is to be cautious, but at some point it will almost become a burden on their overall return. '
Mr. Buffett's cash climbed again in the quarter, sitting on that liquidity, and could implement lucrative deals such as investing in Goldman Sachs and General Electric in the crisis, and investing $10 billion in Western oil in the third quarter to make the Anadarko deal possible.
But in addition to betting on Western oil, Mr. Buffett was still net selling stocks in the quarter, and with the S & P 500 hitting record highs, bottom trading became increasingly difficult to find. In addition, Berkshire has lost the market this year. As of Friday, the company's class A shares were up 5.7% a year, less than the 22% increase in the S & P 500 index.
Mr. Buffett acknowledged that the prospect of acquiring companies in the near future is not good at a time when prices are 'sky high'. But he said he was still keen on 'Mega Acquisitions'.