Berkshire’s Cash Reserve Climbs to $325B (Is Buffett Preparing His Successor for a Giant Move?)

Warren Buffett’s latest move in the market is something only a true OG investor would dare: he’s piled up $325 billion in cash while the rest of us are holding onto our Apple stocks for dear life. 

For context, that’s more cash than the GDP of countries like Finland ($300 billion), New Zealand ($249 billion), or Peru ($229 billion). Yep, the Oracle of Omaha could theoretically buy up Peru, slap a “Welcome to Berkshireland” sign on it, and still have change to spare.

So, what's going on? Well, for starters, Buffett’s been clearing out his Apple shares like leftovers in the fridge. Since August, he’s whittled down Berkshire’s Apple stake by over a hundred million shares, leaving Berkshire with around 300 million shares valued at just under $70 billion. And it’s not just Apple—Bank of America’s been feeling the sting of Buffett’s sell orders too. In the past few months, Buffett dumped over $10 billion worth of BofA shares, ending what was once one of his big, long-term love affairs in the banking sector dating back to 2011.

The $36.1 billion in stock sales last quarter marks the fourth consecutive quarter of Buffett’s grand sell-a-thon. His steady cash hoarding and reluctance to buy Berkshire shares (he didn’t repurchase a single one this quarter) have left some shareholders with their mouths wide open in disbelief. CFRA analyst Cathy Seifert says it’s giving off a bit of a “the sky is falling” vibe. After all, when Warren Buffett (a guy who’s historically hoards stocks like bread and milk before a blizzard) starts cashing out quicker than a last call at the bar, you can’t help but wonder if he’s caught wind of something we’re all in the dark about.

Why the change of heart? A few theories are floating around. For one, Buffett hinted earlier this year that he’s betting taxes on capital gains could be on the rise. It’s no secret the U.S. is swimming in debt, and tax hikes could be the bailout. Plus, with his longtime partner, Charlie Munger, gone, some analysts speculate that Buffett, never a huge tech fan himself, might be scaling back on his Apple exposure as a sort of “Munger tribute.” After all, Munger loved Apple. Buffett? Well, he once called the iPhone maker “an even better business than Coca-Cola.” But apparently, that love was conditional.

And speaking of cash flow, Berkshire has still been collecting billions (just not from buying or selling). Thanks to high yields on Treasury bills, Buffett’s stash generated a cool $3.5 billion in interest in the last quarter alone. That’s enough to buy around 500,000 Tesla Model Ys, not that Buffett’s rushing to the EV market anytime soon (aside from his BYD investment). 

(Source: Fortune)

In fact, this entire cash hoarding strategy feels like it’s straight out of Buffett’s “wait-for-the-perfect-moment” playbook. Remember the financial crisis? Berkshire pounced when others panicked. Only this time, the clock is ticking, and a younger generation of big players like Apollo and Blackstone have swooped in with their cash to snap up deals left and right.

Berkshire’s towering cash reserves should give successor Greg Abel, 62, an enviable edge—if there’s actually something worthwhile to buy. But here’s the thing: that fortress of funds could turn into a source of frustration if the market refuses to offer up the kind of bargain Buffett lives for. At 94, he’s played the waiting game longer than most, but even he might feel the itch to put that cash to work sooner rather than later.

(Source: CNBC)

For now, though, Buffett’s sticking to his mantra: hold cash close, keep his Apple shares at arm’s length, and watch the market without rushing in. In his world, sometimes the best move is just watching everyone else play.

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Stock.News has positions in Apple, Tesla, and Coca Cola.