Warren Buffett's Rule for Stock Buybacks Is Very Specific. Berkshire Spent a Record $9.6 Billion on Them Last Quarter.
The rule boils down to two tests. Would the stock still pass them at today's price?
Berkshire Hathaway made a record $9.6 billion in stock buybacks in the third quarter of 2026, surpassing its previous record of nearly $9.3 billion from the same quarter in 2020. The company only repurchases shares if management believes they are trading at a discount to the business's intrinsic value, which is conservatively calculated.
Chairman Emeritus Warren Buffett outlined this rule in his 2011 shareholder letter. The company's stock trades near $570 per share, about 12% above its average price in September. Berkshire's CEO and Chairman, Greg Abel and Howard Buffett, now determine if the buyback price is below Berkshire's intrinsic value. The company also maintains a minimum of $30 billion in cash and Treasury bills.
Since 2018, Berkshire has not set a price limit for buybacks, allowing it to purchase shares at higher prices than in the past. The buybacks have accelerated significantly, with no repurchases in 2025, $235 million in Q1 2026, $4.5 billion in Q2 2026, and $5.4 billion in September 2026.
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