Buffett remains active at 96, but Berkshire's shares aren't doing much

Berkshire’s Class B shares slid to $505.00 (up only 0.5% YTD), lagging the S&P 500 by 12.2 percentage points after an Aug. 10 earnings-driven run-up to $537.74. The newsletter cites lingering investor uncertainty around Greg Abel’s CEO role, continued inaction on Berkshire’s large cash pile ($365.5B at June 30), refusal to pay a dividend, and the lack of a transformative $100B+ acquisition. Offsetting this, Berkshire repurchased $4.5B of shares in Q2 2026 and added a roughly $36.6B stake in Alphabet; it also notes criticism that Trump’s trading of Berkshire stock (three buys, two sells in June) may create appearance-of-impropriety concerns.

Analysis

BRK.B is trading like a capital-allocation story, not an operating story. When a megacap conglomerate sits on a very large cash balance, the market assigns it a lower growth multiple unless management proves it can redeploy that dry powder at returns above the index; absent that, every step down in short rates makes the cash drag more visible over the next 6-18 months.

Alphabet is the only meaningful directional beneficiary here, but the edge is mostly sentiment and validation rather than near-term cash flow. A large, patient holder implicitly reinforces the idea that AI capex and regulatory headlines have not broken the long-duration earnings power of the franchise; that can matter if investors are rotating between "expensive growth" and "self-funding compounders."

The contrarian risk on Berkshire is that succession uncertainty is probably less important than the market assumes: the decentralized model reduces key-man risk, and the stock can re-rate quickly if capital returns step up or a large acquisition proves the cash pile is productive. What would falsify the bearish relative view is a clear acceleration in buybacks or a major deal; what would extend underperformance is another quarter of idle cash plus a softer rate backdrop that removes the carry advantage.

Key Decisions for Investors

• Maintain an underweight BRK.B vs SPY for the next 1-3 months; add on rallies toward the recent highs and cover if BRK.B closes decisively above that resistance or if the next earnings/13F shows materially faster buybacks.
• Pair trade: long GOOGL / short BRK.B over 6-12 weeks to express 'quality compounder with catalyst' versus 'value with no near-term catalyst'; cut the short if Berkshire announces a large acquisition or a step-up in repurchases.
• No trade on DJT from this item alone; treat the Berkshire transaction disclosure as portfolio-noise unless broader governance restrictions become a live legislative catalyst.
• Watch BRK.B for a regime shift in capital deployment rather than headline succession commentary; if cash-to-marketable-securities stops growing and repurchases accelerate, reassess the dead-money thesis immediately.