Is Warren Buffett Bearish Or Waiting To Pounce? Berkshire Now Owns More T-Bills Than Federal Reserve, Several Countries

Billionaire Warren Buffett‘s Berkshire Hathaway Inc BRK BRK surprised many observers by offloading a significant portion of Berkshire’s Apple Inc AAPL holdings in the second quarter.

Berkshire Hathaway’s balance sheet is now substantially weighted to United States treasury bills.

The Data: According to Berkshire’s most recent filing, the Omaha, Nebraska-based company now owns $234 billion in treasury bills.

That’s more than the Federal Reserve’s $195 billion treasury bill war chest. The U.S. central bank has gradually wound down its balance sheet in recent years.

It is also more than several countries, including Brazil, Germany and Mexico.

Berkshire held $97 billion in treasury bills a year ago, still a mighty sum but less than half of today’s mark. Its stock has appreciated over 20% since then.

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What’s Next: Buffett’s strategy with his large cash pile is unclear.

Buffett could be wary of Apple’s prospects amid a sea of significant regulatory hurdles. Its future use of artificial intelligence is still unclear. Berkshire’s Apple position is still its largest holding, but down over 50% since the end of 2023.

On a larger scale, Buffett could be bearish on the U.S. economy. Recession fears have intensified and the market has undergone a significant pullback since the beginning of summer.

Alternatively, Buffett could simply be holding cash to forestall a large, future acquisition. The Omaha native has long championed taking advantage of market dips with large investments. Many of his acquisitions come as surprises to the market.

Regardless, the nonagenarian is taking advantage of the high interest rate environment — over 5% — and delivering operating profit growth to shareholders.

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Image created using artificial intelligence via Midjourney.