Aug. 8 (Bloomberg) -- Warren Buffett’s Berkshire Hathaway Inc., whose top three shareholdings declined by about $1.6 billion last week, disclosed its biggest quarterly purchase of equities in almost three years. Berkshire bought $3.62 billion of stock in the three months ended June 30, the most since it spent $3.94 billion in the third quarter of 2008, the Omaha, Nebraska-based company said late Aug. 5 in a filing. Equity purchases exceeded acquisitions of fixed-maturity securities for the first time since 2009. Berkshire Hathaway Inc. Chairman and CEO Warren Buffett Buffett, 80, turned his focus to stocks as Berkshireâs cash swelled and interest rates remained near record lows. The firmâs equity portfolio, which rose to $67.6 billion as of June 30, suffered last week as markets plummeted. Stocks around the world fell amid signs the U.S. economy was stalling and speculation that Europe will fail to contain its sovereign-debt crisis. âHeâs gotta put the cash to work somewhere,â said Tom Lewandowski, an analyst with Edward Jones & Co. âWeâve seen the market pull back, and this is the environment he likes to make investments in.â Transatlantic Holdings Inc. said yesterday that Berkshire offered about $3.25 billion in a bid to break up the New York- based reinsurerâs deal to merge with Allied World Assurance Company Holdings AG. The equity market rout helped push down the value of Alliedâs all-stock bid by about 13 percent from the last trading day before the June announcement through Aug. 5. Stock Plunge U.S. and European stocks posted the biggest weekly declines since November 2008. The Standard & Poorâs 500 Index fell 7.2 percent, erasing its gains for the year, while the Stoxx 600 Europe Index tumbled 9.9 percent to its lowest in 13 months. The U.S. government was stripped of its AAA credit rating by S&P on Aug. 5 after the close of New York trading. Buffett, Berkshireâs chairman and chief executive officer, reported a 74 percent jump in second-quarter profit in the filing. Cash holdings climbed 16 percent in three months to $47.9 billion at the end of June as Goldman Sachs Group Inc. repaid Buffettâs 2008 investment. Net income of $3.42 billion was boosted by derivative returns and earnings from the companyâs manufacturing and retailing units. Buffett said Aug. 6 that while the market slump may hurt confidence, the U.S. will probably avoid a recession. âFinancial markets create their own dynamics, but I donât think weâre facing a double-dip recession,â Buffett told Bloomberg Televisionâs Betty Liu. âClearly what stock markets do have is an effect on confidence, and this selloff can create a lack of confidence.â Economic Slump Two-year Treasury yields fell to a record low on Aug. 4 as reports on manufacturing and consumer spending trailed economistsâ forecasts. The European Central Bank has signaled it is ready to start buying Italian and Spanish securities to counter the sovereign debt crisis. Buffett said S&P made a mistake and the U.S. deserved a âquadruple Aâ rating. Berkshire sold $200 million of equities in the three months ended in June, the second-smallest quarterly total in more than three years. The company spent $2.78 billion on fixed-maturity securities. Buffett built Berkshire over four decades by acquiring businesses including car insurer Geico Corp. and betting on stocks like Coca-Cola Co. After debt markets froze in 2008, Buffett used more than $10 billion of Berkshireâs cash to finance New York-based Goldman Sachs, General Electric Co. and Swiss Reinsurance Co. In 2010, he spent $26.5 billion on the takeover of railroad Burlington Northern Santa Fe. âRecovery Betâ Berkshire increased its stockholdings this year in firms it labeled âcommercial, industrial and other.â That portfolio was $10.7 billion on June 30 on a cost basis, compared with $6.5 billion on Dec. 31. The âconsumer productsâ portfolio was down 2.4 percent by that measure while holdings of âbanks, insurance and financeâ were up less than 1 percent. âThat is basically a recovery bet,â Glenn Tongue, a partner at Berkshire shareholder T2 Partners LLC, said of the increase in the commercial and industrial portfolio. âEquities are available today at prices where heâs almost certain to generate an adequate rate of return.â Coca-Cola, Berkshireâs biggest shareholding, fell 1.8 percent last week, wiping $248 million from the market value of Buffettâs stake. Wells Fargo & Co., the No. 2 holding, dropped 9.8 percent, lowering Berkshireâs holding by $935 million. The stake in American Express Co., Berkshireâs third-largest stockholding, fell by $429 million as the credit-card companyâs shares slipped 5.7 percent. Buffett is overseeing changes to the stock portfolio after hiring former hedge-fund manager Todd Combs last year to help with investments. Berkshire bought MasterCard Inc. shares in the first quarter, the only publicly disclosed addition to Berkshireâs U.S. equity holdings. The company hasnât filed its second-quarter list of holdings yet. Berkshire agreed in March to buy Lubrizol Corp., the Wickliffe, Ohio-based maker of engine additives, for about $9 billion in cash. Buffettâs firm, which doesnât pay a dividend, uses earnings and premiums from insurance units to fund investments and acquisitions. One thing I noticed about Warren Buffett is his keen foresight. Somehow he is able to see a trend year/years before "the experts" and mortals like us and then bet or not bet big. NASDAQ was rocketing up to 5,000 and Buffett totally avoided tech. stocks. He was somewhat ridiculed for missing the boat and even questioned whether he lost his touch. Fast forward 2 years, and NASDAQ spectacularly crashed to 1,100 from 5,000. He then bet big on silver in 2002 and said it was a long term investment. Well, silver has done pretty well since 2002. He called the derivatives something akin to finanicial weapons of mass destruction like 2 years before the 2008-09 crash. I had no clue what he exactly meant until the spectacular 2008-09 crash. He bet on transports like railroad stocks before they took off. He has a macro long term view and is in early. Not sure when he exits though. He seems to also have an immediate impact on whatever he invests in. e.g. When there is a breaking news that Buffett has made a large investment in stock XYZ at 12:00 PM on a Monday, the stock XYZ will go up immediately and most likely until 4 PM. I am surprised with his latest equities recovery investment because of gloom and doom out there right now. That said, I don't listen to what Buffett says and don't follow his investments. I never have. But maybe I should start paying attention to Buffett.