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Warren Buffett has been quietly making a huge bet on a well-known conglomerate with thousands of employees around the world: Berkshire Hathaway Inc.
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While Mr. Buffett has increasingly faced pressure this year to use his nearly $150 billion cash pile to purchase significant stakes in or the entire business of a company, the world's most famous investor has seemingly made few acquisitions. Among the few deals he did make are Berkshire's purchase of Dominion Energy Inc.'s midstream energy business and its investment of $6 billion in five Japanese companies.
Berkshire also made a $250 million investment in the initial public offering for the data-warehousing company Snowflake Inc.
But none of these 2020 investments have risen to the "elephant" scale, Mr. Buffett's term for a big buy, relative to the conglomerate's size and available cash.
|BRK.A||BERKSHIRE HATHAWAY INC.||341,754.00||+4,943.00||+1.47%|
|BRK.B||BERKSHIRE HATHAWAY INC.||227.42||+2.70||+1.20%|
Warren Buffett has been quietly making a huge bet on a well-known conglomerate with thousands of employees around the world: Berkshire Hathaway Inc. (JOHANNES EISELE/AFP via Getty Images)
Even after the billions in buybacks, Berkshire's cash and Treasury bonds total $145.7 billion, as of the end of September. Mr. Buffett himself didn't expect to be sitting on this much cash at this point.
At a 2017 annual meeting, he said, "There's no way I can come back here three years from now and tell you that we hold $150 billion or so in cash or more, and we think we're doing something brilliant by doing it."
He added: "I would say that history is on our side, but it would be more fun if the phone would ring."
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When the phone has rung since then, the deal wasn't the right price for Mr. Buffett.
Buybacks are Mr. Buffett's last option for use of cash after reinvesting in Berkshire and buying other companies, said Stephen Biggar, director of financial-institutions research at Argus Research.
Indeed, Mr. Buffett eschewed buybacks until recent years.
"It's a bit of a recognition that he doesn't see any sizable acquisition, " Mr. Biggar said.