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Berkshire Hathaway buys $4 billion of stock, holds $28 billion of cash

Warren Buffett buys $4 billion of stock during the second quarter, according to the reported just released by Warren Buffett’s investment company Berkshire Hathaway. He holds $28 billion of cash, which has been in decline over last years.

According to the financial statements of Berkshire Hathaway, during the first half of 2008, Warren Buffett bought $5.5 billion of stocks, $1.5 billion of that was purchased during the first quarter. Also Warren Buffett sold more than $1.6 billion of stocks during the second quarter. The stock market has been in fear, it is not surprising to see that Warren Buffett bought more stocks.

What did Warren Buffett buy? GuruFocus is hosting a quarterly contest for users to guess what Warren Buffett buys during the second quarter. If you have not done so, you are invited to participate this contest. The deadline of the contest is next week, which Warren Buffett reports his portfolio holdings.

The recent stock market decline certainly reduced the size of the portfolios of a lot of investors. As the beset investor ever, Warren Buffett is not immune, if that is any comfort to others. The prices of Warren Buffett’s holdings like American Express (AXP), Wells Fargo (WFC) have seen their multi-year lows in the last month. Even with the net purchases of more than $3.8 billion this year, Warren Buffett’s stock portfolio has declined from $74.5 billion to $69.5 billion.

But Warren Buffett has been busy shopping, mostly in fixed maturity securities. He has spent $26 billion so far this year on fixed maturity securities, $16 billion in the second quarter alone. The recent financial market crisis certainly created a lot of opportunities for him. Some of the money is spent on the reported Mars-Wrigley Deal and Dow Chemical- Rohm & Haas deal. What are the others?

With a lot of financial assets are sold at less than 50 cents on a dollar, it is no wonder that Warren Buffett gets busy.


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