After 14 quarters of selling, Berkshire Hathaway's leadership has decided to start buying.
Warren Buffett has been more of a seller than a buyer for the last three and a half years. For fourteen straight quarters, Berkshire Hathaway sold more stocks than it bought, and the company's cash pile grew and grew, becoming a symbol of Buffett's caution. Now, for the first time since Greg Abel formally took the helm, the tables have turned. In the second quarter of 2026, Berkshire bought nearly $20 billion in stocks on a net basis, accelerated share buybacks, and spent over $16 billion on two acquisitions. I’ve been watching this for a few weeks, and it seems to me that this is exactly the moment when the new era of Berkshire starts to distinguish itself from the old one – not in words, but in money.
The numbers in the results look like a celebration at first glance. Net profit jumped to $25.7 billion, more than double last year’s. But this figure is largely an accounting illusion, and the real story lies elsewhere – in what Abel did with the cash that Buffett refused to spend for years.
Buffett has already played these games once
Buffett has played these games before, and in a much tougher version. In the fall of 2008, in the midst of the financial crisis when almost everyone was afraid, he poured five billion dollars into preferred shares of Goldman Sachs $GS on terms that the bank would never have signed under normal circumstances – a ten percent dividend plus warrants to buy shares at a fraction of their later price.
A few weeks later, he added three billion into General Electric $GE under similarly favorable terms. At that moment, he wrote his famous “Buy American. I am.” message in the New York Times. The market was crashing, companies were desperately seeking capital, and Buffett had the only thing that was worth its weight in gold at that moment – cash and composure.
That’s exactly why Berkshire is hoarding cash now. It’s not a coincidence or laziness; it’s a strategy: to have funds when the company needs them most, not when everyone else has them.
The difference between 2008 and today is that the current situation is not a crisis. The market isn’t rising on panic; it’s rising on euphoria around artificial intelligence and mega-cap tech companies. Abel isn’t buying into fear like Buffett did back then, but is deciding that even in an expensively priced market, there are places worth betting on.
What really happened in the numbers
The doubled profit is primarily a result of an accounting rule from 2018 that forces Berkshire to reflect unrealized gains from its stock portfolio in its income statement – that is, paper appreciation of shares the company hasn’t sold at all. In the second quarter, this added over $16 billion, compared to just $6.4 billion in the same period last year.
Buffett himself has repeated for years that these numbers have almost nothing to do with the company’s actual performance. If you look at purely operating profit, i.e., excluding market fluctuations, you get an increase to approximately $13 billion, up 16 percent year-over-year. Decent, but not double.
More interesting is where the company is losing. Insurance, historically the engine of the entire conglomerate, went in the opposite direction from the rest of the business. Insurance profit fell by 13 percent, and the main culprit is GEICO, the group’s largest auto insurer, whose underwriting profit dropped from $1.8 billion to less than a billion – a decline of 45 percent. Behind this are rising accident frequency and severity, with the loss ratio jumping to 76.6 percent from last year’s 71.8. Moreover, GEICO increased spending on commissions and advertising by more than a quarter, a clear signal that it is trying to regain market share lost in recent years. The reinsurance division BHRG, on the other hand, improved by more than 40 percent, so insurance as a whole is not a disaster, just has one big sore spot.
But what matters is what happened outside insurance. Abel invested ten billion dollars in a private placement of Alphabet $GOOG shares, financing expansion in artificial intelligence. According to regulatory filings, Alphabet is now among the top five portfolio positions alongside Apple $AAPL, American Express $AXP, Bank of America $BAC, and Coca-Cola $KO – though Apple is estimated to still hold the top spot with a share of around twenty percent of the portfolio. Add to that the acquisition of chemical company OxyChem for $9.4 billion and homebuilder Taylor Morrison for $6.8 billion, plus accelerated buybacks of $4.5 billion, a jump from just $235 million in the first quarter. The result is that Berkshire’s cash cushion has shrunk noticeably for the first time in years, from $373.3 billion at the end of last year to $365.5 billion at the end of June.
Abel, meanwhile, has clearly defined boundaries on where he will and won’t go with that cash. When asked if Berkshire would venture into cryptocurrencies, he answered curtly that he simply doesn’t see it. This conservative instinct remains, even as aggressiveness in capital allocation has risen. I honestly really like that!
Why I take this as a bull signal, not a coincidence
The market has reacted coolly so far – Berkshire shares have gained only about 3 percent this year, while the S&P 500 rose by 13. Over the last three months, Berkshire did add 9 percent, but it’s still a company the market is waiting on, to see if Abel can do what Buffett did for sixty years. But I see it as more of a signal than a doubt.
Fourteen quarters of net selling wasn’t a mood, it was discipline. Buffett long maintained that he didn’t see enough cheap opportunities in the market, and hoarded cash even as critics bashed him for years. Abel is now deploying that same cash – not blindly, but targeted: a massive bet on Alphabet as exposure to AI infrastructure, two specific off-market acquisitions, accelerated buybacks of own shares. This behavior shows that the company finally sees value where it hadn’t for a long time. For me, the key is that Abel himself said the balance sheet is a strategic asset to be deployed at the right moment. That’s exactly the same sentence Buffett would have said.
Risk, of course, exists. GEICO is losing form, and the market may not believe Abel for years, regardless of how good the numbers he brings are. But the end of fourteen quarters of caution is not a coincidence or one aberrant quarter – it’s the first confirmation that the company’s philosophy hasn’t changed, only the person executing it has.
