Buffett’s cash pile just got even larger
Warren Buffett has just announced he's stepping down as CEO of Berkshire Hathaway—and he's leaving behind a massive pile of cash. Since 2024, Buffett has sold off a huge amount of stock, more than doubling Berkshire’s cash reserves from $167bn to $348bn.
And just in time, too. He built this reserve right before the market crashed in Q1 2025. Berkshire is now sitting on its largest cash position ever—more than the $263bn it holds in public equities, and more than Apple, Amazon, Alphabet and Microsoft have in cash combined.
To put it in perspective: $348bn is enough to buy every NFL and NBA team, with $34bn left over.
That might not be Buffett’s plan, but it raises the question: did he see this crash coming?
Past performance isn’t a reliable indicator of future results
Why investors watch Buffett’s every move
There’s a reason so many people look to Buffett for market cues. He’s widely considered one of the greatest investors of all time. The stock for Berkshire Hathaway has consistently outperformed the S&P 500, averaging 20% annual returns across Buffett’s six-decade career—double the index’s 10%.
That outperformance is especially visible this year. While the S&P is up about 2% year-to-date, Berkshire’s stock has gained nearly 10%.
So, what’s his secret? He insists there isn’t one. His philosophy: buy companies with strong fundamentals and hold them for the long term.
Selling instead of holding
But recently, Buffett hasn’t been holding. He’s been selling.
Berkshire has sold more equity than it’s bought for 10 consecutive quarters. Among the sales: over 600 million shares of Apple stock in 2024—worth around $117.6bn. That cut Berkshire’s stake in Apple by 67%, though it remains its biggest holding.
Buffett once called Apple “probably the best business I know in the world”, so the scale of the sell-off surprised many.
They also sold 41% of their Bank of America stake in 2024 and trimmed other financial holdings.
These moves seem to contradict Buffett’s famous ‘buy-and-hold’ approach—but they’ve worked. Berkshire has outpaced the S&P 500 by nearly 30% since the start of 2025, breaking through a long-held resistance level.
The Buffett indicator: are stocks too expensive?
Buffett probably wouldn’t take credit for predicting the market. Instead, he might point to a chart he’s long used: the Buffett Indicator. It compares the total US stock market capitalisation to US GDP.
Buffett has called it “the best single measure of where valuations stand”. A reading over 100% suggests overvaluation—and we’re now near 200%, an all-time high.
Valuations alone don’t predict when a crash will happen, but they can signal how severe one might be. Previous peaks in this indicator came just before the 2000 dot-com bubble and the 2008 crisis.
So, building up cash wasn’t just cautious—it was deliberate. Buffett prepared for turbulence.
Treasuries: safe and yielding
Berkshire’s $348bn isn’t sitting idle. Most of it—88% or $35bn—is invested in US Treasuries. These are as close to cash as it gets, and Berkshire now holds more US Treasuries than the Federal Reserve.
Those holdings are projected to earn $12bn in risk-free, government-backed returns.
That’s still below the S&P’s historical 10% annual average—and far below Buffett’s 20%. But with interest rates still above inflation, Treasuries are currently delivering a rare real yield without the risk that comes with equities.
Stocks vs Treasuries: a rare gap
One way to compare opportunities is to look at the earnings yield of the S&P 500—currently just over 3.8%.
Now compare that to a 3-month Treasury yield, which is about 4.3%. The spread between the two is negative, and at a 23-year low. That means the equity market is offering lower returns than short-term government debt.
In that light, Buffett’s war chest starts to look less like a hoard—and more like the world’s biggest rainy day fund.
Ready to bag an elephant?
But there may be another reason for holding so much cash.
Buffett has long described Berkshire’s reserve as an “elephant gun”—ready to fire when a large, high-quality company becomes available at the right price. He’s indicated he’s on the hunt.
It’s been a few years since Berkshire made a major acquisition. But during the 2022 bear market, Buffett deployed over $50bn into stocks—his most aggressive buying spree since 2008. He picked up shares in Ally Financial, Chevron, Occidental Petroleum and others.
This recent market drop may be the moment he’s been waiting for. Historically, Buffett has pounced in times of extreme fear—just as he did in 2008 with his Goldman Sachs deal.
Still, some observers believe he’s holding back. Business Insider reports that Buffett might be waiting for an even larger drop or more clarity on the economic outlook. One concern: Trump’s new tariffs, which are the biggest since the 1930s.
Steve Hanke, an economics professor, suggests that Buffett’s next big move will reveal his read on the economy.
The takeaway: a signal worth watching
Whatever Buffett plans to do with Berkshire’s $348bn—whether it’s riding out a downturn or going all-in on a major buy—it’s likely to follow his famous mantra:
At Capital.com, we’ll continue to keep you updated on market developments. For more context, explore the latest list of Berkshire Hathaway’s top holdings.