Warren Buffett’s Berkshire Hathaway made a big bet on U.S. stocks in the first quarter, buying $51.1 billion in shares as he let the sprawling conglomerate go by as financial markets tumbled from record highs cash reserves come into play.

Investors who have been sellers of stocks for the past two years have warned of high valuations and few investors in the market that can generate substantial returns, a dramatic shift.

But global financial markets have weakened in recent months as Russia’s invasion of Ukraine and fears of a slowing Chinese economy have dented investor confidence.

That provides him with a more attractive entry, analysts and investors said, warm to the so-called Oracle of Omaha’s vote of confidence in the stock market.

The frenzied pace of stock buying was enough to dent Berkshire’s cash hoard, which Buffett has often likened to a war fund. Its cash fell to $106.3 billion at the end of March from just under $147 billion at the end of the year. The company’s first-quarter report showed that it sold $9.7 billion in stock during the period, suggesting it bought a net $41 billion of stock at the start of the year — its most active quarter in recent memory one.

Berkshire Hathaway sharply increased its stake in energy company Chevron, placing its $25.9 billion stake among the top five holdings in its stock portfolio now worth $390 billion, the report showed. one. This year’s investment in Chevron has been accompanied by multibillion-dollar stock purchases in oil giant Occidental Petroleum and printer and computer maker Hewlett-Packard.

To fund those investments, as well as the $3.2 billion used for share buybacks in the quarter, Berkshire sold or let more than $44 billion worth of Treasuries and other securities mature during the quarter.

Buffett, who has been on the sidelines for much of the pandemic era, has seen a boost in his trading prowess in recent months. In March, he bought insurance company to toy maker Alleghany for $11.6 billion.

The figures were revealed Saturday as tens of thousands of Berkshire Hathaway shareholders came to Omaha to hear from billionaire investors at the company’s annual meeting, the first in-person meeting since 2019. .

Berkshire Hathaway reported net income of $5.5 billion in the first three months of 2022, less than half the level of a year ago. The company’s results included a $1.6 billion loss on its investment and derivatives portfolio.

Performance line chart (%) since early 2020 shows Berkshire stock outperforming the market

Stripping out those swings, which Buffett criticized as “often meaningless” because U.S. accounting rules require changes in the value of its portfolio to be included in quarterly results, the company reported an operating profit of $7.04 billion. That’s slightly higher than the gain a year ago.

The results showed that the company’s railroad, utilities and manufacturing businesses reported stronger profits in the quarter compared to a year earlier.

Revenue from the BNSF railroad rose 11 percent to $5.8 billion, which Buffett described as one of the group’s four giants in a letter to shareholders in February. The company warned that supply chain disruptions, including a drop in car shipments due to chip shortages, have weighed on shipments.

“Furthermore, developments in geopolitical conflict in 2022 lead to disruptions in supply chains, resulting in higher costs for goods, goods and services in many parts of the world,” it added.

Clayton Homes, its unit that makes modular homes, reported a 21 percent increase in sales. While it said demand remained strong, it warned that rising mortgage costs “could slow demand for new housing construction, which could adversely affect our business.”

Profits at the insurance business, which includes Geico, were all but wiped out, falling to just $47 million from $764 million a year earlier. The Geico division reported underwriting losses during the period, blaming the increase in insurance claims and the cost of paying those benefits.

Berkshire Hathaway shares have outperformed U.S. stocks this year, rising 7.5%, while the benchmark S&P 500 has fallen 13%.