The Oracle of Omaha has gazed into his future and seen a lot of cash.
What happened: Warren Buffett’s Berkshire Hathaway increased its cash holdings to a new record of US$325.2 billion, selling off more than US$36 billion of stocks including a quarter of its stake in Apple.
- Like a friendlier version of the dragon from The Hobbit, Buffett has been stockpiling cash for some time now — this is the eighth consecutive quarter he’s been a net seller of stocks.
Why it’s happening: Buffett said that he’s just not seeing that many well-priced opportunities in the market right now, and won’t buy “unless we think we're doing something that has very little risk and can make us a lot of money."
- He also said that since cash equivalents like Treasury bills are offering a more attractive yield, the bar for investing in companies is higher than it was when interest rates hovered around zero.
Why it matters: When one of the world’s most successful investors starts dumping stocks from his portfolio amid a record-breaking market run-up, people take notice — Buffett’s positioning suggests he believes the stock market is due for a correction.—TS