Warren Buffett’s Berkshire Hathaway sharply slowed its pace of new investments in the second quarter after its accelerated pace earlier this year, as a sell-off in the U.S. stock market pushed the railroad insurance conglomerate to a loss of $43.8 billion in the three months to June.
Berkshire said on Saturday that the slump in global financial markets had weighed heavily on its stock portfolio, which fell in value to $328 billion from $391 billion at the end of March. The reported losses of $53 billion far exceeded an upbeat quarter for its businesses, which improved its profitability.
The company’s filing with U.S. securities regulators showed its new stock purchases fell to about $6.2 billion in the quarter, down from the $51.1 billion it spent between January and March, once which surprised Berkshire shareholders. Berkshire sold $2.3 billion in shares over the past three months.
Berkshire also spent $1 billion buying back its own stock in June, a tactic commonly used when Buffett and his investment team can find less attractive targets in the market.
The 91-year-old investor noted at the firm’s annual meeting in Omaha in April that the flurry of multibillion-dollar stock purchases is likely to slow as the year goes on, saying the the atmosphere at the company’s headquarters had become more “lethargic”.
Investors will get a more detailed update on how Berkshire’s stock portfolio has changed later this month, when the company and other big money managers disclose their investments to regulators. Separate documents show the company has increased its stake in energy company Occidental Petroleum in recent months.
Investments in the quarter meant Berkshire’s huge cash and Treasury holdings were little changed since late March, falling less than $1 billion to $105.4 billion.
While net income fell from a profit of $5.5 billion at the start of the year to a loss of $43.8 billion, operating income, which excludes ups and downs in stock positions of Berkshire, rose 39% to $9.3 billion.
Berkshire must include changes in the value of its portfolio of stocks and derivatives as part of its earnings each quarter, an accounting rule that Buffett has warned can make the company’s earnings numbers look “extremely misleading “.