Berkshire Hathaway's Q2 Earnings, Buybacks, and Buffett's Succession

# Berkshire Hathaway Q2 2024 Performance: Market Reactions, Leadership Changes, and Investment Outlook

Explore Berkshire Hathaway's latest financial journey as Class A shares hover near $725,000, just below their 52-week high. This episode dissects the company's disappointing Q2 results, including normalized underwriting performance, increased catastrophe payouts from California wildfires, and a significant $5 billion write-down on its Kraft Heinz stake.

We analyze why share repurchases halted after years of aggressive buybacks, and what this signals about management's view of intrinsic value. With book value rising 10.9% year-over-year despite headwinds, we examine whether the current price-to-book ratio of 1.5x might trigger renewed buyback activity.

The podcast also covers Warren Buffett's announced CEO transition plan, recent insider selling by Vice Chairman Ajit Jain, and whether these developments should concern long-term investors. Learn why Berkshire remains a quality compounder with strong fundamentals and a fortress balance sheet, despite near-term sentiment challenges from softer insurance earnings and leadership transitions.

Perfect for investors seeking insights on conglomerate valuations, succession planning at iconic companies, and navigating market volatility in blue-chip stocks.

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Episode Transcript

Speaker 1 (00:00):
I am watching Berkshire halfaway. Class A trade near seven
hundred twenty five thousand United States dollars, hovering just below
its fifty two week high around seven hundred forty two
thousand United States dollars, with recent prints yesterday around six
hundred and ninety eight thousand United States dollars as markets
closed late last week. Volumes in the Class A line

(00:21):
remain characteristically thin at roughly two thousand shares recently, broadly
in line with typical low liquidity for this share class,
while Class B volume around three million to six million
shares on recent days suggests interest as cooled versus earlier
summer spikes. What matters more today is the newsflow. Second

(00:42):
quarter results disappointed some investors as underwriting normalized after a
strong twenty twenty four, including larger catastrophe payouts tied to
California wildfires, which helped push operating earnings down roughly four
percent quarter over quarter, and foreign exchange effects or another headwind.
The company also recorded an additional write down of approximately

(01:05):
five billion United States dollars on its craft hind stake,
echoing a prior impairment from twenty nineteen, which weighed on
reported earnings. Despite that, book value per share rose about
two point one percent from the first quarter and roughly
ten point nine percent year on year, leaving the shares
around one and one half times book value, a level

(01:27):
that historically has been a reference point for potential buybacks. Notably,
share repurchases reportedly halted in the second quarter after a
multi year run where Berkshire retired tens of billions of
United States dollars of stock, which some read as a
signal that management sought a larger discount to intrinsic value.

(01:49):
With the pullback over the past three months, some observers
argue buybacks could resume if valuation dips further. An additional
strategic overhang is the announced plan for war Warren Buffett
to step down as chief executive officer at year end,
which contributed to volatility and a sentiment reset on governance

(02:10):
and insider activity. A recent filing showed vice chairman Ajit
Jayne selling two thousand shares for about nine hundred twenty
nine thousand United States dollars, a modest transaction in context,
but one that traders noted given the timing. Metting it out.
I see a high quality compounder whose fundamentals remain intact,

(02:32):
with book value growth and a fortress balance sheet, trading
near a historically watchful price to book zone, but with
near term sentiment pressured by softer insurance earnings, an impairment charge,
and leadership transition headlines