Berkshire Hathaway still believes its own stock is cheap.
The company spent $9.6 billion buying back shares last quarter while its operating earnings declined. That suggests Warren Buffett’s successor Greg Abel is making a valuation call rather than a bet on an improving quarter.
The conglomerate more than doubled its second-quarter buybacks of $4.5 billion and brought the total through September to $14.4 billion.
That is a marked change in appetite after buying back zero shares in 2025.
That rising line on the chart means Berkshire is spending more to shrink its share count.
Now, Berkshire typically only initiates buybacks when its executive team believes the price is below conservatively estimated intrinsic value.
In effect, Greg Abel & Co. believes its portfolio of businesses are worth more than the stock price implied when Berkshire bought.
But to be clear, that does not tell us their estimate of fair value or guarantee that today's price offers the same discount.
What also stands out from Berkshire’s latest filings is that it still has an overwhelming preference for cash.
Its insurance and other businesses ended September with more than $352 billion in cash and cash equivalents after accounting for unsettled Treasury purchases.
The cash pile has dipped slightly but remains historic and gargantuan even after the spike in buybacks.
That leaves plenty of room for Berkshire to keep repurchasing shares or acquire other businesses with just about no impact to its balance sheet.
Still, operating earnings fell 5.8% from a year earlier to $12.7 billion.
Buybacks do not fix that dip, but they do suggest Berkshire sees value in itself despite the slowdown.
Elsewhere
🏦 The jobs report revived bets for a December rate hike. Polymarket sees odds of a quarter-point hike at the Fed’s December meeting near 78% after employers added 165,000 jobs in October, more than double the forecast. (Yahoo Finance)
🛢 Tankers were hit near the Strait of Hormuz on Saturday. Iran said two oil tankers caught fire after hitting mines, while the US said its air force disabled a vessel in the Gulf of Oman as it tried to get through the blockade. (CNBC)
📊 Tech stocks now trade cheaper than the S&P 500. The sector traded at about 17x expected earnings last week, below the broader index’s 18x for the first time since 2017. (Yahoo Finance)
Rapid-fire
Wall Street hiring helped finance jobs post their first gain since June (Yahoo Finance)
Here’s why Wall Street is bracing for slower AI spending growth (Searching for Signals)
Democrats are drawing up plans to unwind Trump’s tariffs starting with Canada (CNBC)
Big banks expect more political theater than real change from a Democratic Congress (Fortune)
Mary Daly says the Fed will likely need to raise rates further (CNBC)
Chip stocks closed Friday nearly 20% below their 50-day average (Opening Bell Daily)
On this day
🗓 November 9, 2016: Dow futures plunged about 800 points overnight after Donald Trump’s surprise election win, then the Dow closed up 256.95 points, or 1.4%, at 18,589.69.
Last thing
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