Dear partners,
This is the portfolio's monthly update reflecting all changes taken place in July 2026, reflected at the start of August 2026:
Current asset allocation by market sector:
- Finance: 21.14%
- Consumer non-durables: 13.04%
- Technology Services: 9.78%
- ETFs: 20.91%
- Consumer Services: 7.64%
- Retail Trade: 1.73%
- Distribution Services: 3.73%
- Process Industries: 2.24%
- Producer Manufacturing: 1.99%
- Electronic Technology: 2.12%
- Industrial Services: 1.89%
- Consumer Durables: 1.52%
- Health Technology: 1.1%
- Miscellaneous: 1.28%
Liquid cash: 12.77%
War chest assets: 10% of portfolio's current net worth
Ratio of dividend paying to non-dividend paying positions:
77% : 23%
Portfolio's current standard deviation:
4.3% (as of Aug 2026, decreased from June)
The past few days have seen me looking through the numbers of Berkshire Hathaway's earnings report released on August 8th, 2026. In short, the conglomerate's results beat analysts' forecasts, with operating earnings 16% year-on-year.
Berkshire also repurchased approximately 4.5 billion dollars of its own shares in the past quarter as its new CEO Greg Abel begun deploying some of its massive cash pile. As of this writing, Berkshire Class B shares (our largest holding at 8.42% of the portfolio) sits at a gain of 3.93% for the 2026 thus far, compared to the S&P500 12.68%.
However, while 16% year-on-year does come off impressive , some attention must be drawn towards logical reality.
If foreign currency gains (mostly from yen-denominated debt Berkshire accumulated to fund investments made in 2019 into five Sogo shosha) on non-dollar debt were discounted from the equation, actual operating profit would be around 5-6%, a massive difference from the reported 16%.*
Geico, long considered by Buffett to be one of the cornerstones of Berkshire Hathaway and also its largest insurance business, saw its earnings fall 45% in Q2. It was initially one of the conglomerate's best performers heading into 2026.
In May, Greg Abel further highlighted that the insurance industry is becoming an even more challenging market even as competitors "bring a variety of products and forms." along with additional capital.
In essence, the insurance market is softening because of fresh capital affecting pricing power and Berkshire is pulling back. I am of the opinion that this is somewhat reminiscent of the 2010s.
As always, I'll be keeping a close eye as we enter Q3 2026, and prepare the portfolio to react accordingly.
Thank you for your continued vote of confidence, and all the best in your investment/trading endeavors.
Alderique.
*When the yen weakens against the dollar, the dollar value of that yen debt shrinks. That is reflected as a gain in the accountings books. Conversely, when the yen strengthens, it becomes a loss.... Show More
Not investment advice. The author may have financial interests in the mentioned instruments.
i like the distinction you make between the headline 16% operating earnings growth and what the underlying figure may look like after the currency impact. It is a useful reminder that headline numbers can sometimes hide quite a different story underneath
The 45% decline at Geico is also something I... Show More
Interesting update, Aaron. I particularly like the transparency around your cash allocation. With 12.77% currently in cash, do you see this mainly as dry powder for a broader market correction, or are you already waiting for specific opportunities? Thanks for sharing the detailed update.... Show More
Thanks Aaron, that makes perfect sense. I like the focus on flexibility rather than trying to predict the market. With valuations still elevated in parts of the market, having dry powder certainly seems valuable right now. 👍... Show More
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