Warren Buffett Favors 5% Treasury Bills Over Buybacks As Berkshire Hathaway's Cash Pile Balloons To $334 Billion: 'The Rate Of Change… That's Most Telling,' Says Expert

Berkshire Hathaway Inc.’s BRK BRK share repurchases have dropped dramatically as Warren Buffett appears to prefer 5% Treasury bills over buying back company stock.

What Happened: Berkshire’s buybacks fell to $2.9 billion in 2024 from $9.2 billion in 2023 and $7.9 billion in 2022, Bear Traps Report founder Lawrence McDonald noted on Sunday on X. This decline comes as the conglomerate’s cash reserves have surged nearly 300% since 2022, reaching $334 billion by 2025.

“It’s NOT the size of the cash hoard, it’s the ‘rate of change’ in the size of the cash that’s most telling,” McDonald wrote, highlighting Berkshire’s rapidly growing cash position from $109 billion in 2022 to $277 billion in 2024.

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Why It Matters: The 94-year-old Buffett addressed these trends in his annual letter to shareholders on Saturday, reaffirming his commitment to business ownership despite the record cash pile. He assured investors that Berkshire would “forever deploy a substantial majority of their money in equities — mostly American equities.”

The surge in cash reserves comes as Berkshire has reduced stakes in several companies, including Citigroup and Bank of America while reinvesting proceeds into Treasury bills. Buffett cited improved Treasury yields as a factor, though he warned that fixed-coupon bonds offer no protection against currency devaluation.

The shifting allocation strategy reflects both current market conditions and Buffett’s cautious outlook. With U.S. stocks at record valuations, the legendary investor has found it challenging to identify attractive acquisition targets, leading to the unprecedented accumulation of cash equivalents despite his historical preference for owning businesses outright.

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