Warren Buffett’s distaste for overpaying is winning out over his frustration with sitting on a lot of cash.

With stocks at record highs, Berkshire Hathaway Inc. sold $1 billion more worth of stocks than it bought last quarter, its biggest net selling since the end of 2017. Buffett spent last year building a massive stake in Apple Inc. and pouring billions into investments in the biggest U.S. banks. This year’s rally hasn’t drawn him in.

Buffett has previously dealt with the issue of cash piling up as he waits to strike, but never at this size. He hasn’t had a major acquisition in several years and has even pulled back on one of his newer ways to deploy cash, slowing down repurchases of Berkshire’s own stock in the second quarter. The result was that the company’s cash hoard -- a major focus for investors in recent years -- surged to a record $122 billion.

“It would be hard to look at the cash balance and their uses of cash in recent quarters and not be disappointed that they haven’t bought any companies, they haven’t bought much stock, and they haven’t bought back a lot of their own stock,” Jim Shanahan, an analyst at Edward Jones, said in a phone interview Saturday.

The growing cash pile is a reflection of the strength of the operating businesses that Buffett has assembled under one roof, and allows the billionaire investor flexibility to move quickly when big deals emerge. But he has acknowledged that having more than $100 billion earn little return for several years weighs on the company’s growth.

Buffett, 88, earned his legendary status by consistently outperforming the broader market, but Berkshire’s total return has trailed the S&P 500 over the last five, 10 and 15 years. That’s raised questions of whether Berkshire has grown too large to generate excess returns, and whether the cash would be better off returned to shareholders than left for his eventual successor to pursue a major deal.

Buffett has tried to get ahead of those concerns, spending his last few annual meetings and letters to shareholders extolling the value of keeping Berkshire together as a conglomerate and maintaining the company’s status as the first call for unique opportunities.

“Berkshire has been set up to be counter-cyclical, to have a war chest that can take advantage of significant dislocations in the market,” said Richard Cook, who oversees $330 million including Berkshire shares at Cook & Bynum Capital Management.

Buffett’s been here before. In his 1998 letter to investors, he lamented $15 billion in cash that was burning a hole in his pocket with “nothing on the horizon” in terms of good acquisitions or large equity bets. Months later, while dot-com companies were the rage and Berkshire’s stock was slipping, he bought a majority stake in power utility MidAmerican Energy.

That deal became the building block for the energy business that he now refers to as one of the two “redwoods” in the most valuable part of Berkshire’s forest. It also delivered the executive -- Greg Abel -- who many consider the front-runner to be his successor.

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