Why Warren Buffett is holding a record amount of cash
Legendary value investor Warren Buffett has just built up the largest cash cushion in Berkshire Hathaway’s history.
After selling over $75 billion in stock—including sizeable Apple holdings—Buffett’s conglomerate now sits on $277 billion in cash and equivalents. But what does this unprecedented cash hoard really signal about his outlook—and what can everyday investors learn?
Past performance isn’t a reliable indicator of future results
The all-time high cash position
- Current level: $277 billion in cash and equivalents.
- Recent jump: From $189 billion to $277 billion in the latest quarterly filings—the steepest rise in three decades.
- Historical peaks: Similar cash hoards appeared in 2007 (prior to the Global Financial Crisis) and late 2021 (before a 20% market pullback), both times followed by massive deployments into beaten-down stocks.
Cash as a share of total assets
Looking at raw dollars can be misleading—Berkshire’s overall portfolio has grown substantially. A clearer picture emerges when we express cash as a percentage of total assets:
| Date | Cash as % of Total Assets |
| January 2006 | ~15% |
| Pre-2008 Crisis | Declining from 15% to 10% |
| Late 2021 | ~18% |
| Q1 2025 (Today) | ~22% |
- Buffett’s cash allocation is at its highest percentage ever, slightly above levels seen in January 2006—two years before the 2008 crash.
- Yet, between early 2006 and the onset of the Great Recession, Berkshire’s cash share actually declined, as Buffett redeployed reserves into opportunities that arose.
Buffett’s philosophy: Value over prediction
Buffett has repeatedly emphasised he doesn’t try to time the market or forecast recessions. Instead, he follows the wisdom of his mentor Benjamin Graham:
“Buy great businesses at fair prices.”
When the Buffett Indicator (total U.S. stock-market value divided by GDP) sits near all-time highs—as it does today—it suggests markets are expensive. Under such conditions, Buffett prefers to:
- Hold cash and wait.
- Deploy reserves only when valuations become attractive again.
With cash yielding nearly 5% in today’s high-rate environment and the S&P 500’s earnings yield around 3.6%, parking funds in cash can outpace owning expensive equities—at least temporarily.
What investors should do
- Assess valuations: Use the Buffett Indicator to gauge whether markets are overextended.
- Maintain flexibility: A healthy cash buffer allows you to act decisively when opportunities arise.
- Stick to value: Focus on high-quality businesses, not market timing—buy when they’re on sale.
Key takeaways
- Berkshire Hathaway’s $277 billion cash pile is the largest in 30 years, now ~22% of total assets.
- Historical parallels (2007, 2021) show Buffett builds cash before deploying into downturns.
- High cash yields and lofty equity valuations justify a defensive stance today.
- True value investing isn’t about predicting recessions—it’s about buying great companies at reasonable prices.
At Capital.com, we’ll continue to track Buffett’s moves, valuation metrics and market developments to help you apply time-tested investment principles with confidence.
Explore more expert insights in our Educational Hub.