Doesn't he know he should just put it into an S&P500 and hold it long term to get 8% or put some of it into NVDA, or SMH or something? Why is he dumping stocks like mad and putting them into short term money market/government treasuries? Doesn't he know it will be inflated away over time. What a regard, if he just put that money into 0dts, he could be the world's first trillionaire. /s
Why is Warren Buffett hoarding such a huge cash pile?
byu/vegaseller inwallstreetbets
Posted by vegaseller
38 Comments
I dunno i just texted him asking
Bears commenting told you so recession coming in 3..2..1..
I’ll ask him for you when he comes through my McDonalds drive thru tomorrow mornin
Don’t tell anyone I told you this but I have information that he is buying out Intel, turning it into a quantum computing company, and cracking bitcoin with it.
He’s probably a little more intelligent than most on here.
Waiting for the dip like many of us
Giant Scrooge McDuck swimming pool in Nebraska.
Buying up all the tuna fish sandwiches on white bread
because Cash is King
He is taking profit and diversifying his portfolio.
Because currently he can earn some short-term & risk-free interest for it.
Dragon Sickness
He’s just waiting on coca colas stock price to drop a bit
He thinks instability & cost are two huge factors in an investments LT value.
If tax laws change in the coming months, or years & it happens to quickly pass by greedy bureaucrats, it will exponentially increase the cost of converting investments to cash, & thus decreases value of many LT holdings.
As well it is un-clear currently how strong USA dollar will be w so many fighting for a better stance & other large group forming that can check USAs worldwide economic strength. In which case if there is smart value to move money to another countries opportunities in another currency not US dollars, he wants to have cash on hand, to invest in value w/o paying people who didn’t make the money.
I’m new to finance, but I’ve seen this word liquidation being thrown around, I assume he wants his cash in liquid form so he can swim in it like Scrooge McDuck
Call me a yard, but I believe he has an idea what he is doing and why.. just a hunch😂
Honestly, I think he’s just losing touch with the markets. He’s gotten a bit too old for this, and what the market values now is not what he’s good at.
On a serious note, he has in past said that:
1) as the markets go up, its harder to invest because of crazy pe ratios. This doesnt necessarily mean he is waiting for a crash and knows that something is gonna happen. Its just harder to rationalize investment decissions.
2) he has also said that investing becomes harder due to the size of the company – sometimes there just arent that many great investing opportunities and you might end up at a point where you have “too much” money to invest it all. If you have 100k to invest its relatively easy, but it becomes a totally different story when you are talking about billions to invest.
He
Huge cash pile in number but not in % of assets
He must think a big crash is going to happen.
Hahaha why do you think man? Does Warren need to care and take the ride? Or is he focused on a short term cash position that’ll ride him out until death do us part ;). Then he’s dead—what does he care what his successors do?
There are two reasons why imho:
* Berkshire is the biggest re-insurer on the planet. If an insurance has like a million houses insured in cyclone-prone areas like Florida, it risks having to shell lots of tens of billions of dollars in damages if things go south and going bankrupt. So what does insurances do is that they insure themselves for such things. This is a very profitable business for Berkshire because Berkshire can charge premiums others can’t. Why is that? Because Berkshire is the only company in the world with enough cash to pay if things turn bad. Those companies that look for reinsurance need to sleep knowing that their own insurance will pay no matter what. And the pool of companies that can give you those guarantees in the world is extremely limited. In fact, if you look at their balance sheets in detail, you’ll notice that the actual amount of money available is a small fraction of their cash and short-term investments (few tens of billions), while the large majority is indeed locked as collateral. Berkshire does this with any kind of insurer out there, not just home insurers and such.
* Buffett is bearish and doesn’t find current valuations anywhere near fair.
If I had to give my 2 cents, I just don’t find Buffett’s stock portfolio movements in the last 5 years to be very well managed. The overwhelming majority of things didn’t perform anywhere near the sp500 average. Some others good cows have been sold way prematurely (Apple is the latest example, he’s missed a 40B+ capital gain in the last year), but that’s a pattern of bad choices he started long ago (such as selling McDonald’s which outperformed the market for decades to come in total returns (so reinvesting the dividends)). He keeps buying and buying oil during a switch to electric vehicles and when production capacity is at all times high (there’s at least another 15 to 20M barrels capacity per day right now, untapped) and predicted to further increase in non-OPEC countries, but it doesn’t look like crude has that many chances to stabilize at 100$+ to make those investments really pay off imho.
I believe some of his risk adverse strategy is to protect BRK when he inevitably passes away.
Probably to roll around in like Scrooge McDuck.
I don’t think he trusts the market right now. Plus he knows he will die soon and he instructed his wife to sell 90% of his assets when that happens.
To prop up the federal reserve.
Just think about this for a minute. The guy that has made the most by leveraging the leverage, the relationships with the SEC and monetary institution, his lifelong business partner recently dying, and he himself is tasting his own mortality.
Just imagine for a moment: he is doing the ultimate American sacrifice as a true patriot! He is putting his enormous war chest that he has built over his long and illustrious life…to fucking save America!
So when we all think back on that con job that claims he wants to Make America Great Again, Mr. Warren *the man* Buffett didn’t say anything, continued to be our real hero, and sacrificed his enormous war chest to preserve the federal reserve.
Yes, Berkshire Hathaway will make an immense fortune from risking all that capital, but he is now leveraged the ultimate leverage: the entire U.S. economy.
So, how you like them apples (or Coke)? 😉
Because he‘s disciplined.
His rich friends gave him the heads up
Sounds like you should apply to be his financial advisor…clearly he has no idea what he is doing!
Also, I don’t think he wants to be a trillionaire ..he keeps giving money away
One theory is that he is getting old and wants his successor to have the cash to invest in their vision…also, let’s be honest…when he is no longer in charge of Berkshire…it’s going to tank
Ikr. Apparently he didn’t get the memo from the hoards of internet geniuses that DCA into the S&P is the only way to live.
So far he has missed out on:
2019 – 130B*8% = 10.4B
2020 – 150B *8% = 12B
2021 – 150B = another 12B
2022 – 110B*8% = 8.8B
2023 – 150B = 12B
He has basically missed out on over 50B in profits by sitting on this much cash lol if they don’t get a chance to buy some serious dips soon, its gonna get harder and harder to make up for that opportunity cost
(yes the math is shit but I am lazy, feel free to do it better)
https://preview.redd.it/nw6kdww0ejtd1.png?width=500&format=png&auto=webp&s=371e58ee6f3acd7cfe8b092975d72299d465272c
… or at least he is getting there.
putting cash in a jar and burying it in the yard was It is literally a joke back in my native lands for the short circuit for old people get at a certain age.
I say old guy doing old guy things, among which is feeling good about a pile of cash. That is why when it is time to do a currency reset, old people get fucked the hardest. They either have cash that goes to shit or are owed some sort of old age security/social security/defined benefit pensions that go to shit. It is just part of the circle of life…
Humans have been burying gold along with the pharaohs since we learned to make giant piles of rocks…
he said it’s because he believes taxes will go up, so he sold now and because he believes most companies are over valued – bearish sentiment
he reaped his crop
It’s an ego thing. He never actually made anything just a picker
Everyone wants to try the Scrooge McDuck bathtub thing at least once
Well hes about to die its probably easer for his will for his assets to be cash
Elections to buy??