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John Ballard, The Motley Fool
Tue, August 11, 2026 astatine 8:05 AM CDT 4 min read
When Warren Buffett retired arsenic CEO of Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) astatine the extremity of 2025, helium handed incoming CEO Greg Abel a monolithic warfare thorax of astir $369 billion. That currency hoard has travel down, but not much, inactive sitting astatine astir $360 cardinal successful currency and short-term Treasuries astatine the extremity of the 2nd quarter.
Berkshire besides held astir $323 cardinal successful equity securities successful Q2 and was a nett purchaser of astir $12 cardinal successful stocks during the archetypal fractional of 2026. Additionally, the institution has made 3 deals, including the $9.7 cardinal OxyChem acquisition, the $8.5 cardinal Taylor Morrison acquisition, and a $10 cardinal backstage placement with Alphabet.
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Abel has been allocating superior selectively. His patience for the close opportunities shows wherefore helium was the close antheral to pb Berkshire.
Dry pulverization for the close opportunities
In his archetypal shareholder missive earlier this year, Abel called Berkshire's monolithic currency presumption "dry powder," adding, "We volition ever purpose for ownership of productive businesses implicit U.S. Treasuries."
Recent moves amusement he's consenting to enactment erstwhile the setup is right. The backstage placement with Alphabet helps money the tech giant's artificial quality infrastructure build-out, which could substance aboriginal maturation successful its unreality business. This comes connected apical of the 54 cardinal shares Berkshire already held successful Google's genitor institution successful the archetypal quarter.
Along with the OxyChem and Taylor Morrison deals, Abel is already signaling that Berkshire volition instrumentality to Buffett's playbook: putting currency to enactment successful durable businesses erstwhile valuations marque sense. In the meantime, Berkshire's currency hoard is earning existent wealth successful today's higher-rate environment. Discount accretion connected U.S. Treasuries topped $6 cardinal successful the archetypal fractional of 2026, oregon astir $12 cardinal annualized, reflecting the involvement income recognized connected Berkshire's T-bills.
High valuations marque Abel's hunt much hard
The situation is that valuations crossed the banal marketplace stay astatine historically elevated levels. The S&P 500's trailing price-to-earnings ratio is presently 29.8 times -- good supra the humanities mean of 16.2 times. Even implicit the past 25 years, the scale has typically fluctuated betwixt astir 20 and 25 times earnings.
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