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Two weeks ago, Berkshire Hathaway reported its huge cash reserves declined by billions of dollars during the second quarter, the first significant drop since early 2022.
It appeared to many, including me, that Greg Abel was making his mark as the company's new CEO by putting a "big chunk of Berkshire's cash to work."
In the wake of last week's disclosure of exactly what it had in its equity portfolio as of June 30, it now looks like it's more complicated than that.
Barron's Andrew Bary makes the case that Abel hasn't been involved in stock calls at all and its Warren Buffett who "still likes making big investment decisions involving Berkshire's $350 billion-plus equity portfolio—and letting Berkshire holders know that he's still in the game" as he approaches his 96th birthday.
While Buffett was careful to note he often talks with Abel, and neither would do anything the other didn't approve of, he revealed in a CNBC interview last month he had "initiated" Berkshire's Alphabet investment.
That stock first appeared in the portfolio in last year's third quarter.
Bloomberg News reported that Berkshire's Q2 purchase of $10 billion in Alphabet shares directly from the company came after Abel gave a "rapid signoff" to the deal in response to a "stealthy weekend call" to Berkshire from Goldman Sachs, the firm putting together Alphabet's enormous equity offering.
Bary believes the second largest purchase in Q2, Delta Air Lines, was the work of portfolio manager Ted Weschler.
He notes Abel has "no formal portfolio management experience and doesn't appear to be making any notable stock-picking decisions" while "he has his hands full" running Berkshire's many operating companies and looking for new ones to buy.
Abel has been spending some of Berkshire's cash with his $6.8 billion acquisition of Taylor Morrison Home, although it didn't close until after Q2 ended.
The roughly $17 billion increase in Berkshire Hathaway's Alphabet stake during the second quarter made Google's parent the third largest holding in the company's equity portfolio, displacing Coca-Cola in that slot.
As of June 30, the end of the quarter, the Alphabet shares had a market value of $37.77 billion, $5.26 billion ahead of Coca-Cola's $32.51 billion.
Since then, however, Alphabet shares have dropped by 3.5% while Coca-Cola has rallied by 12.1%.
As a result, as of Friday's close, Alphabet's lead is just a razor-thin $20 million.
