Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) has undergone its biggest change in over half a century. With Warren Buffett’s retirement as CEO, the conglomerate has a new leader for the first time since he took over the former textile manufacturer in 1965. While change often brings uncertainty, the company is exceptionally well-positioned to continue thriving.
Here are two reasons to buy Berkshire Hathaway stock like there’s no tomorrow.
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Berkshire Hathaway ended the third quarter with a record cash position of $381.7 billion. The company has built up its massive cash war chest by retaining earnings from its operating businesses and dividends from its investments. It has also been selectively selling down some of its stock portfolio, including significantly reducing its position in its top holding, Apple, which it has cut by 75% since the middle of 2023.
The company’s massive cash position gives it so much optionality. It could meaningfully capitalize on a major market downturn by scooping up shares of great public companies at better prices. Berkshire could also buy back more of its stock if the share price starts to slump. Additionally, Berkshire could acquire more high-quality companies as opportunities emerge. Its cash position gives new CEO Greg Abel multiple ways to grow shareholder value going forward.
There are growing concerns among investors about how distributive AI might be in specific industries. Most recently, much of the market’s unease has focused on AI’s potential impact on the software sector.
While Berkshire Hathaway isn’t completely immune to the potential disruptions of AI, it’s much more insulated than other companies. That’s due in part to Buffett and Munger’s long-standing aversion to investing in tech stocks. They preferred to invest in businesses they…
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