The Oracle of Omaha, Warren Buffett, is about to turn 94 and he has a lifetime of experience to share with investors around the world. So, if the Berkshire Hathaway CEO is hoarding huge quantities of cash, you might want to re-examine your own holdings now.
Reportedly, Berkshire’s pile of cash grew last quarter to $276.9 billion, a record for the company. Granted, a “record” doesn’t hold as much weight when the dollar has been severely devalued over the past few years.
Nevertheless, it’s Warren Buffett we’re talking about here. It means something when Berkshire Hathaway is unloading stocks and choosing to hold a massive pile of cash.
Furthermore, it’s a sharp increase in Berkshire’s cash hoard. The previous record was $189 billion in the first quarter, so nearly $277 billion represents a big difference.
For seven consecutive quarters, Berkshire Hathaway has been a net seller of stocks. The company didn’t even buy a huge quantity of its own shares recently, relatively speaking. Specifically, Berkshire only repurchased $345 million worth of its own stock in the second quarter, versus $2 billion worth in each of the prior two quarters.

Courtesy: @Dividend_Dollar
All of this begs the question of whether Warren Buffett is waiting for a stock-market crash to happen soon. It’s hard to know for sure, since he generally doesn’t provide short-term market predictions.
On the other hand, we might not need for Buffett to explicitly state his view of the economy and markets. As the old saying goes, actions speak louder than words.
For instance, Berkshire Hathaway recently sold large quantities of Apple stock and Bank of America stock. These are usually considered leaders in the U.S. technology and financial sectors.
Maybe Buffett just wants to take profits and/or reallocate his company’s capital toward other sectors of the American economy. Yet, it’s also possible that he envisions trouble ahead for Apple, Bank of America, and so on.
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Moreover, it’s not a positive sign that Berkshire Hathaway is buying back significantly less of its own stock shares. Berkshire stock functions, more or less, like a diversified broad-market index fund. If Buffett were truly confident about the U.S. economy, shouldn’t Berkshire be ramping up the purchases of its own stock shares?
While Buffett doesn’t typically provide specific recommendations, he did offer some general insight during Berkshire Hathaway’s annual shareholder meeting in May. Regarding the spending of capital on investments, Buffett stated, “We’d love to spend it, but we won’t spend it unless we think [a business is] doing something that has very little risk and can make us a lot of money.”
Buffett added, “It’s just that… things aren’t attractive.” We can assume that he means “attractive” from a valuation standpoint. In other words, large-cap stocks are too expensive for Buffett’s taste.

Courtesy: @carbonfinancex
This isn’t to suggest that you need to hide out in an all-cash position. It is meaningful, however, that the Oracle of Omaha is holding a whole lot of dry powder for new, better opportunities.
As it turns out, there are opportunities right now and there will be more in the near future. The idea is to set your buy-price targets on high-conviction stocks and other assets, which don’t necessarily have to be famous names like Apple or Bank of America.
For example, there are uranium-related stocks that happen to be trading at a discount at the moment. And, as always, precious-metal stocks offer opportunities for leveraged exposure to the upside in gold and silver.
You won’t find some of the stocks I like in Buffett’s holdings, but that’s fine. It’s entirely possible to appreciate Buffett’s penchant for good value – which I certainly do – without having to mimic his exact moves.
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