Warren Buffett's cash mountain grows to record $168 billion as Berkshire Hathaway struggles to find bargains

• Warren Buffett's Berkshire Hathaway grew its cash pile to a record $168 billion last quarter.
• The investor and his team were net sellers of stocks but accelerated buybacks in the period.

Warren Buffett's mountain of money swelled to a fresh high in the fourth quarter as the bargain hunter came up short in his search for compelling places to spend it.

The famed investor's Berkshire Hathaway grew its stash of cash and Treasury bills by 7% in three months to a record $168 billion — a roughly $60 billion increase in 15 months, its annual report revealed on Saturday.

Buffett and his team plowed $7.3 billion into stocks in the period. But they also sold $7.8 billion worth, meaning they disposed of $525 million of stocks on a net basis. They were net sellers of $24 billion for the full year, a sharp contrast to their purchase of $34 billion in stocks on a net basis in 2022.

The centibillionaire stockpicker also spent $2.2 billion on buybacks in the quarter after spending $2.6 billion over the preceding six months. Berkshire repurchased $9.2 billion of its stock last year, up from $7.9 billion in 2022, but that's still a paltry amount compared to the north of $24 billion it deployed in both 2020 and 2021.

Berkshire's ballooning cash pile and relatively muted stock purchases and buybacks highlight the challenge Buffett faces as a value investor operating in a booming market with a bright economic outlook. The benchmark S&P 500 stock index has jumped by about 30% since the start of last year and broke through the 5,000-point mark for the first time this month. Berkshire stock has also climbed to record highs, making buybacks less attractive.

Meanwhile, the US economy grew by over 3% last quarter, unemployment remains at a historical low, and inflation has recently cooled, paving the way for the Federal Reserve to slash interest rates and stimulate growth.

Berkshire is widely seen as a microcosm of the US economy, as its subsidiaries operate in industries ranging from insurance and railroads to manufacturing, real estate, and retail. As a result, it's not too surprising the solid economic backdrop boosted several of its businesses last quarter.

The conglomerate's operating earnings surged by 28% to $8.5 billion, fueling a 21% increase in full-year profits. That reflected a strong rebound for its insurance business, partly offset by earnings declines in its railroad and energy segments.

Berkshire's latest earnings report also highlighted Pilot Travel Centers, the truck-stop chain it took full ownership of in January. Pilot generated a hefty $57 billion of revenues last year and roughly $1 billion in pre-tax earnings, making it a significant contributor to Berkshire's financials.