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Legendary investor Warren Buffett is making a strategic, albeit surprising, move by reducing exposure to equities and increasing his cash holdings on the heels of appealing interest rates.
According to the latest quarterly financial results of his conglomerate, Berkshire Hathaway Inc. (NYSE:BRK), the position in cash, cash equivalents, and U.S. Treasury Bills rose to $157.2 billion in value at the end of September.
A significant portion, approximately $127.6 billion, was invested in U.S. Treasury Bills, which typically mature within a year. This represented an increase of $10 billion compared to the end of June 2023.
Berkshire Hathaway’s cash stockpile is now at its highest level since the third quarter of 2021.
“We bought $10 billion in Treasuries this Monday. And the only question for next Monday is whether we will buy $10 billion in 3-month or 6-month T-bills,” he said in a CNBC interview. “There are some things people shouldn’t worry about.”
Berkshire Hathaway’s net acquisitions of U.S. Treasury Bills and fixed maturity securities surged to $134.2 billion during the initial nine months of 2023, marking a significant increase from the $69.37 billion recorded in the same period of 2022.
“We continue to hold substantial balances of cash, cash equivalents, U.S. Treasury Bills and other investments with relatively short maturities. We continue to believe that maintaining ample liquidity is paramount and we insist on safety over yield with respect to short-term investments,” Berkshire Hathaway wrote in its third-quarter report.
Buffett’s influence appears to have resonated strongly among market participants, as they allocated a significant $3.2 billion into the cash-like SPDR Bloomberg 1-3 Month T-Bill ETF (NYSE:BIL) over the past week, marking the largest weekly inflow since April 2020.
Due to the shift toward cash, Berkshire Hathaway’s equity stock portfolio witnessed a reduction. At the end of the third quarter, it stood at $341 billion, down from $375.8 billion at the end of June.
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