2 days ago
Warren Buffett has over $334 billion in cash and treasury bills currently. The Oracle of Omaha, with this cash pile, can buy any of the bottom 476 companies on the S&P 500 by market capitalisation.
As of Tuesday's close, AbbVie Inc. ranked as the 24th biggest company on the S&P 500 with a market capitalisation of $312 billion, which is less than his cash pile.
The combined market capitalisation of the S&P 500-listed companies, as of Tuesday's close, stood at $45.37 trillion. The S&P 500 accounts for approximately 80% of the market value of all publicly traded US stocks and includes 500 of the nation's largest companies.
Buffett loaded on cash in 2024 when indices on Wall Street were making new highs. He sold shares of his largest holding, Apple Inc., along with Bank of America, which is also among his largest positions he has held for years.
Buffett has been hoarding cash after trimming major holdings, including in Apple and Bank of America.
According to the data in Berkshire Hathaway's filings, Buffett dumped nearly $80 billion worth of Apple's shares in 2024, while his Bank of America selling crossed well over $10 billion.
Buffett lamented that sometimes one needs to sit on cash since opportunities to buy are not appealing enough. "Often, nothing looks compelling; very infrequently we find ourselves knee-deep in opportunities."
"We own nothing that is a major drag, but we have a number that I should not have purchased. In the other hand, we own a small percentage of a dozen or so very large and highly profitable businesses with household names such as Apple, American Express, Coca-Cola and Moody’s. Many of these companies earn very high returns on the net tangible equity required for their operations. At year-end, our partial-ownership holdings were valued at $272 billion," Buffett wrote in his annual letter to Berkshire Hathaway shareholders.
The billionaire investor also explained why the company held $334 billion in cash at the end of 2024.
His decision to hold more cash has paid off. Berkshire Hathaway’s stock is up over 17% in 2025, while the S&P 500 has dropped 8%.
Still, Buffett reassured investors that most of Berkshire’s money is still in stocks, especially US stocks. He said this won’t change anytime soon.
In the letter, he wrote, “Berkshire will never prefer owning cash-like assets over owning good businesses, whether we fully or partly own them.”
Meanwhile, US stocks recorded modest losses on Tuesday as investors analysed the latest batch of first-quarter earnings reports and enjoyed a recent decline in market turmoil.
The Dow Jones Industrial Average tumbled 155.83 points, or 0.38%, to close at 40,368.96. The S&P 500 fell 0.17% and ended at 5,396.63. The Nasdaq Composite declined 0.05% and closed at 16,823.17. The three averages are coming off back-to-back winning sessions.
Tuesday's muted moves were in stark contrast to the volatile swings seen in recent sessions.
The CBOE Volatility Index, or VIX, known as Wall Street's "fear gauge," fell to about 30 after hitting a high of around 60 last week.
US stocks may be due for more chaotic moves following US President Donald Trump's tariff uncertainty, analysts believe.
“Technically, we are ‘not out of the woods yet,’ as we’d like to see the SPX recover its March lows and make another ascent toward its 50-/200-day MAs at around 5,750-5,800,” analyst Craig Johnson said. “Investors are returning to the equity market despite the crosscurrents in the macro picture.”
“We expect investors to temporarily shift their attention to earnings and away from tariffs, allowing the macro picture to settle down in the upcoming weeks,”Johnson said.
