Five Highlights of Berkshire Hathaway’s Q3 Report

After the market closed today, Berkshire Hathaway released its 10-Q for the third quarter of 2017.

Five highlights were:

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(1) Berkshire’s operating earnings declined by 29% in the third quarter as a result of underwriting losses from three hurricanes.

(2) Berkshire had $109.3 billion in cash as of September 30, 2017.  Its price to book value ratio is 1.5, which is above its previously announced 1.2 threshold for its stock buybacks.

(3) Berkshire had a net additional investment of $5.9 billion in equities in “Banks, insurance and finance” during the third quarter of 2017.  ($5 billion for exercise of Bank of America (NYSE:BAC) warrant.)

(4) Berkshire decreased its equity investments in “Commercial, industrial, and other” by $2.25 billion based on cost.

(5) Berkshire apparently added 3 million shares of Apple (Nasdaq:AAPL) (+ $450 million).

Charles Munger



About the Author

Dr. David Kass
David I Kass Clinical Associate Professor, Department of Finance Ph.D., Harvard University Robert H. Smith School of Business 4412 Van Munching Hall University of Maryland College Park, MD 20742-1815 Phone: 301-405-9683 Email: dkass@rhsmith.umd.edu (link sends e-mail) Dr. David Kass has published articles in corporate finance, industrial organization, and health economics. He currently teaches Advanced Financial Management and Business Finance, and is the Faculty Champion for the Accelerated Finance Fellows. Prior to joining the faculty of the Smith School in 2004, he held senior positions with the Federal Government (Federal Trade Commission, General Accounting Office, Department of Defense, and the Bureau of Economic Analysis). Dr. Kass has recently appeared on Bloomberg TV, CNBC, PBS Nightly Business Report, Maryland Public Television, Business News Network TV (Canada), Fox TV, American Public Media's Marketplace Radio, and WYPR Radio (Baltimore), and has been quoted on numerous occasions by Bloomberg News and The Wall Street Journal, where he has primarily discussed Warren Buffett and Berkshire Hathaway. He has also launched a Smith School “Warren Buffett” blog. Dr. Kass has accompanied MBA students on trips to Omaha for private meetings with Warren Buffett, and Finance Fellows to Berkshire Hathaway’s annual meetings. He is an officer of the Harvard Business School Club of Washington, DC, and is a member of the investment and budget committees of a local nonprofit organization. Dr. Kass received a Smith School “Top 15% Teaching Award” for the 2009-2010 academic year.