His approach is more cautious than ever and Berkshire Hathaway's eye-popping $325 billion cash stockpile is the outcome of his latest strategy. While investors have long emulated Buffett's moves, his latest decisions have raised eyebrows. This caution speaks volumes for a man known for his optimism in the U.S. economy.
They're sitting on cash because they have a formula. They want to have enough cash in case of a down market where they can take advantage of. If their cash stack is high, they probably are holding out for a crash or a new opportunity to show up.
Buffett's choice to leave his fortune to his children, while staying true to his philanthropic values, reflects his approach to life, family, and legacy. For his kids, this isn't just about money—it's about carrying forward the values he's lived by: hard work, responsibility, and giving back.
Cash as a Strategic Asset
At $325 billion, Berkshire's cash position now represents roughly one-third of its $1 trillion market capitalization. This liquidity isn't just a safety net; it's also a preparation for leadership transition.
In short, companies hold cash because it helps them avoid premature failures that decimate shareholder value.
"He has a history of selling out of the stock market when the leading economic indicators, inverted treasury yields, and his famous Buffett Indicator are signaling a bear market or a recession is coming," Dietrich said.
Despite being the sixth-richest person globally, Warren Buffett continues to drive a 2014 Cadillac XTS he purchased with hail damage. Although he can afford any luxury vehicle, Buffett prefers the practicality of his 10-year-old car.
Over the years, Buffett's feelings about Gates appeared to have cooled. The New York Times reported in August that Buffet began to believe the Gates Foundation had become bureaucratically bloated, hindering philanthropic productivity. He was disheartened to hear some people found Gates rude.
Despite his immense wealth of $145 billion, Buffett's children will not inherit a significant portion for personal use. Instead, they will play a critical role in managing the distribution of his wealth to various charitable causes after his passing.
While it may be prudent for investors to hold some cash for day-to-day living expenses and emergencies, holding too much cash can have significant long-term costs. Investors who hoard cash risk losing out on potential investment returns due to inflation, taxes, and focusing on more suitable investments.
According to Warren Buffett, selling Apple stocks made sense as Buffett believes stocks are trading above their intrinsic value and capital gains taxes are also likely to rise. This makes it advantageous to realize gains at the current lower tax rate as Buffett is trying to lock in profits before potential tax hikes.
N) , opens new tab, has made further preparations for giving away his fortune after his death. Buffett, 94, plans to donate 99.5% of his remaining wealth, now valued at more than $150 billion by Forbes magazine, to a charitable trust overseen by his daughter and two sons when he dies.
In interviews previously, Warren Buffett has stated that he favors 3-month and 6-month Treasury bills as the place to park cash. These have been yielding as much as 5.40% in recent months but for simple math and to be conservative assume Berkshire is earning 5% annually.
Buffett himself has pledged that 99% of his wealth will go to philanthropy during his lifetime or upon his death. As of 2023, the shares he's already given away were worth about $50 billion based on their value at the time of donation, or about $130 billion given Berkshire Hathaway's stock value at the time.
Warren Buffett wrote the Gates Foundation out of his will — and left his money in a trust overseen by his kids.
Buffett's most commonly cited financial advice is as follows, “Rule №1: Never lose money. Rule №2: Never forget rule №1.” So, before investing, determine whether you can lose the money you're investing in.
Buffett is now worth only a few billion dollars less than Ellison — Oracle's chairman and a major Tesla investor — at $126 billion, and Gates — Microsoft's cofounder and one of Buffett's close friends — at $129 billion.
The billionaire investor and Berkshire Hathaway CEO initially balked at the idea of owning a private jet, but ultimately embraced the luxury and convenience. Warren Buffett nicknamed his private jet 'The Indefensible' – then renamed it 'The Indispensable' after realizing its value.
Bezos also owns a car collection reportedly worth around $20 million. His collection includes several high-end vehicles such as a Cadillac Escalade, Land Rover Range Rover, Mercedes-Benz S450, Ferrari Pininfarina Sergio, W Motors' Lykan HyperSport, Bugatti Veyron Mansory and Koenigsegg CCXR Trevita.
He elaborated, “When I'm not feeling quite so prosperous, I might go with the $2.61, which is two sausage patties, and then I put them together and pour myself a Coke. $3.17 is a bacon, egg and cheese biscuit, but the market's down this morning, so I'll pass up the $3.17 and go with the $2.95.”
He's stockpiling cash mainly to protect Berkshire Hathaway after he's gone, argues Clark. Buffett is 94. “He's setting himself up to make his last great bargain buy, as a result of his death,” says Clark, who grew up in Omaha and attended grade school and camp with Buffett's children.
Buffett has said previously that his three kids will distribute his remaining $147.4 billion fortune in the 10 years after his death, but now he has also designated successors for them because it's possible that Buffett's children could die before giving it all away.
Top Warren Buffett Stocks
Coca-Cola (KO), 400 million. Kraft Heinz (KHC), 325.6 million. Apple (AAPL), 300 million. Occidental Petroleum (OXY), 264.3 million.