Net Profit Doubles to $25.67 Billion, Yet Still Bearish? 'The Big Short' Inspiration: Berkshire Is No Longer an Attractive Investment

Michael Burry, the real-life figure behind the Hollywood film 'The Big Short' and a renowned investor, stated last week that his long-held concern—that Warren Buffett's successor would be 'older, ultimately not Buffett, lacking the patience to wait for only the best pitch'—has now come true. He asserted that Berkshire Hathaway is no longer an attractive investment for the future.

The very next day, Berkshire released its Q2 2026 earnings report, described as 'impressive numbers, subtle narrative.'

According to the financial results disclosed by Berkshire last Saturday (8th), the company's net income attributable to shareholders reached $25.67 billion in Q2, nearly doubling from $12.37 billion in the same period last year, primarily due to a rebound in unrealized gains from equity investments. Excluding this item, operating profit was $12.98 billion, up 16.3% year-on-year. Profits from the manufacturing, service, and retail portfolio rose 24% to $4.47 billion, while Geico dragged down underwriting profits in the insurance segment.

Buffett has repeatedly emphasized that 'net income is distorted by fair value fluctuations; operating profit is the true thermometer of core business.'

What truly caught the market's attention was that 'cash is finally moving.' In Q2 2026, Berkshire bought $23.5 billion in stocks and sold $3.7 billion, marking its first net stock purchase in over three years. Simultaneously, it repurchased 478 Class A shares and over 8 million Class B shares, spending approximately $4.5 billion—significantly more than Q1's $234 million, though still below market expectations of $5–11 billion.

As of the end of June 2026, Berkshire's cash and U.S. Treasury holdings totaled $364.7 billion, down 4% from the previous quarter—the first decline in four years. During the same period, the company spent $6.8 billion acquiring homebuilder Taylor Morrison (closed in July, not included in Q2 results) and signed a $1 billion private placement agreement as part of Google's $80 billion fundraising.

In January 2026, Buffett handed over 60 years of leadership to Greg Abel, who officially became CEO of Berkshire, while Buffett remained as Chairman.

Burry's criticism targets this transition gap: whether Abel has the same discipline as Buffett to 'refrain from buying.' However, counterarguments highlight double-digit growth in Q2 operating profit, cash now flowing into buybacks and net stock purchases, and the continued holding of top five positions (Apple, American Express, Bank of America, Coca-Cola, Alphabet)—all cash flow powerhouses.

Paul Lountzis, President of Lountzis Asset Management, noted that 'private markets are extremely frothy, and public markets are somewhat irrational. It's hard to expect Abel to make a mega-deal right now,' suggesting investors are still willing to give him time.

Berkshire's stock rose only 4.28% in Q2, lagging far behind the S&P 500's 14.87% gain. Burry's bearish stance and the market's hesitation reflect the same underlying issue: after a legendary succession, the market no longer seeks 'the next Buffett,' but proof that Abel can deliver results with $364.7 billion in cash.