Why is Warren Buffett hoarding so much cash?
livemint.comThe mountain of cash and Treasury bills at the famed investor’s company, Berkshire Hathaway, rose above $300 billion in the third quarter—easily a record and its highest as a percentage of company assets in data going back to 1998, according to Dow Jones Market Data.
Holding lots of cash is standard practice for Berkshire, but the scale of the recent buildup has raised eyebrows among some observers of the Omaha, Neb., conglomerate.
They are preparing to parse Buffett’s annual letter to shareholders on Saturday for clues about how the Berkshire chairman and chief executive is thinking about the stock market and any opportunities he might see for investing the cash. Berkshire’s annual report, which includes the letter, will show how much cash the company held at the end of 2024.
“The issue is, what are they going to do with all this cash?" said Steven Check, chief investment officer of Check Capital Management, who has attended Berkshire’s annual meetings since 1996. “This is as extreme as I can recall."
Berkshire generates cash from its stable of operating businesses, which range from insurance to rail, from utilities to candy, as well as from its investments. Recently, the company’s investing moves have involved selling a lot of stock. Berkshire was a net seller of equity securities in the past eight reported quarters, and a regulatory disclosure of its U.S. stock positions in December suggests the selling extended to a ninth period.
Buffett’s storied reputation means his company’s trades are watched like those of few investors. When Berkshire sells, it can spark worries that the outlook for stocks is poor. Financial advisers at Edward Jones have voiced their concerns to James Shanahan, a senior equity research analyst
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