Berkshire Hathaway’s A and B shares rose 4.5% this week following a strong earnings report, even as the broader market declined due to fears of overvalued AI stocks and concerns about the U.S. economy. The Nasdaq fell 3%, marking its worst weekly decline since April.

The gains in Berkshire shares have narrowed their underperformance relative to the S&P 500 to 4.3 percentage points, down from 12.2 points on October 29.

Third-Quarter Earnings Highlights

• Operating profits of Berkshire’s wholly owned businesses increased 34% to nearly $13.5 billion.
• Insurance underwriting income surged 200%.
• No stock buybacks were made, signaling Buffett does not view the shares as significantly undervalued.
• Cash holdings reached $381.7 billion as of September 30, up 10.9% from June 30. Adjusted for BNSF cash and Treasury bill timing, cash totals $354.3 billion, up 4.3%.

Potential Farewell from Buffett
Berkshire announced that on November 10, Warren Buffett will issue a press release containing a message about philanthropy, Berkshire, and other matters, which may include a farewell note as he plans to step down as CEO at year-end. While Buffett will remain chairman, new CEO Greg Abel will handle the next annual shareholder letter.

Equity Holdings Adjustments

• Berkshire may have sold Apple shares worth approximately $8 billion during Q3, based on a $1.2 billion reduction in cost basis reported in the 10-Q.
• Bank of America holdings may also have been reduced, accounting for part of Berkshire’s $4.4 billion in equity sales.

Investments in Japan
Berkshire is preparing another yen-denominated bond sale, signaling plans to continue investing in Japanese trading house stocks. These holdings now total nearly $33 billion, up from $31 billion a month ago, with several stocks near all-time highs.

Warnings on AI and Impersonation
Berkshire issued a warning about YouTube videos and AI-generated content impersonating Buffett, cautioning that such videos may mislead the public. Buffett has previously warned that AI could make scams a "growth industry of all time."

Buffett’s Investment Philosophy
Buffett emphasizes that investors should think like owners of farms or apartments, focusing on underlying value rather than short-term price movements. He stresses the importance of staying rational and not being swayed by market fear, highlighting the need for a long-term perspective on investments.

Top Stock Holdings
Berkshire’s major equity holdings include Apple, Bank of America, and significant Japanese trading house stocks such as Itochu and Mitsubishi. Current valuations and holdings details are available on CNBC’s Berkshire Hathaway Portfolio Tracker.

In summary, Berkshire Hathaway reported strong quarterly earnings, maintained substantial cash reserves, and appears poised for continued investment activity while Buffett may soon deliver a final message as CEO.