Record Cash: $347.7 Billion at Berkshire Hathaway
In 2025, the conglomerate Berkshire Hathaway, led by Warren Buffett, reached a historic milestone in cash reserves. By the end of the first quarter of 2025, the company’s cash on hand increased by over $10 billion, totaling approximately $347.7 billion. In comparison, at the end of 2024, this figure stood at $334 billion. This level of cash reserves is the largest in Berkshire Hathaway's history, drawing attention from investors. It indicates that the company is accumulating fiat money while refraining from major investments, preparing for new opportunities in the market. Buffett is known for his cautious approach: a large cash reserve provides flexibility and protection during market corrections or crises, enabling substantial investments when stock prices become attractive based on fundamental analysis.
Ten Consecutive Quarters as a Net Seller of Stocks
Berkshire Hathaway has been a net seller in the stock market for ten consecutive quarters. In other words, since the end of 2022, the company has sold more shares each quarter than it has purchased. In the first quarter of 2025, sales exceeded purchases by approximately $1.5 billion, continuing this unique trend. For Buffett's conglomerate, such an extended period of divesting stocks indicates a cautious stance. The portfolio remains dominated by major investments (including Apple, Bank of America, American Express, Coca-Cola, etc.), though the proportion of these flagship positions has slightly decreased over recent quarters. For example, Berkshire is gradually selling off a portion of its Apple stake, taking profits amid rising stock prices. Buffett's prolonged status as a net seller of stocks echoes the late 1990s and other periods of market overheating when he preferred to accumulate cash rather than chase overvalued assets. For long-term investors, this signals that the stock market currently lacks obvious profitable opportunities, according to one of the most insightful players.
Third Quarter Without Buybacks: A Pause in Stock Repurchases
Alongside the sale of external stocks, Berkshire Hathaway has also paused its stock buybacks. For the third consecutive quarter, the company has not repurchased its shares from the market, despite actively employing this strategy in previous years to return capital to shareholders. Analysts note that this decision is largely tied to the valuation of the conglomerate's own stock. Buffett has emphasized that he will only engage in buybacks if Berkshire’s stock price significantly undervalues its intrinsic worth. In the summer of 2024, Berkshire Hathaway's market capitalization exceeded $1 trillion, and by early May 2025, it approached $1.2 trillion. At these levels, the holding company's shares no longer appear cheap, even to Buffett. The pause in buybacks signals that management considers the current rise in stock prices to be temporarily excessive. This approach stands in stark contrast to many corporations that repurchase their shares at any price: the fundamentally-minded Buffett refrains from using shareholders' capital to invest in overvalued assets.
The Market is Overvalued: Buffett Awaits a Correction
In his annual letter and at the 2025 shareholders' meeting, Warren Buffett indicated that the American stock market is currently overvalued, and there are almost no interesting opportunities for substantial investments in the short term. According to Buffett, the company is diligently seeking suitable targets, although it “cannot find attractive businesses at reasonable prices” under current conditions. He even disclosed that he was recently close to concluding a significant $10 billion deal, but it fell through — presumably due to disagreements over price or risks. Buffett also noted that the recent market decline in the first half of 2025 was too minor for Berkshire Hathaway to begin actively purchasing stocks. In other words, even the recent correction did not bring company valuations to levels that the legendary investor deems justified. Buffett traditionally adheres to the principle: better to miss an opportunity than to overpay. This fundamental analysis and patience indicate that Berkshire is willing to wait as long as necessary, keeping capital in reserve to enter the market at a more favorable moment. For both private and institutional investors, this behavior serves as guidance: it is wiser to wait for a pullback to justified prices rather than chase the market at its peak.
Trade Wars, Inflation, and Fiscal Risks
At the shareholders' meeting, Buffett also touched upon macroeconomic risks that reinforce his cautious stance. He stated that protectionist trade policies and tariffs could severely harm the global economy: “trade should not be used as a weapon.” The increase in U.S. tariffs and retaliatory measures from other countries essentially ignites trade wars, which Buffett describes as a direct “act of war” in economic terms. Tariffs act as a hidden tax on businesses and consumers, ultimately leading to price increases — thus fueling inflation. Within Berkshire Hathaway, several subsidiaries are already preparing for the repercussions of trade conflicts (for instance, manufacturers reliant on imported components are calculating the need to raise prices). Additionally, Buffett expressed concern about the state of U.S. public finances. He stated that the current fiscal policies and enormous budget deficits are genuinely alarming. Government debts are rising, and the country “operates on a deficit that cannot be sustained indefinitely.” This scenario risks accelerating inflation and undermining trust in the dollar in the future. Although Buffett does not engage in short-term predictions or foretell a market crash, he emphasizes the existence of systemic risks. The combination of an overheated market, trade disputes, and the debt burden creates conditions where a serious correction or even a crisis could occur — and Berkshire is evidently preparing for such an eventuality.
Diversifying Reserves: Hinting at Currencies Beyond the Dollar
An interesting topic on the agenda was the future of Berkshire Hathaway's enormous cash reserves in light of the aforementioned risks. Currently, the company holds the majority of its funds in U.S. dollars (in highly liquid assets like U.S. Treasury bills). However, a 4% decline in the dollar's value in the first quarter of 2025 has already cost Berkshire approximately $700 million due to the currency translation of revenues and assets. Commenting on this, Buffett made a subtle hint at possible diversification of currency reserves. He emphasized that the relentless increase in government spending and debt in the U.S. raises concerns about the future value of the American currency. In the past, Buffett has taken similar actions: for instance, in the mid-2000s, he partially converted Berkshire’s capital into other currencies when he believed the dollar was overvalued and vulnerable. Now, with a record cash reserve, the conglomerate may consider holding part of its funds in foreign currencies or assets denominated not only in dollars to mitigate currency risks. Berkshire is already investing abroad — in recent years, it has acquired stakes in major Japanese companies, effectively investing in the yen. Such steps indicate that Buffett's investments are geographically and monetarily diversified, although the lion's share remains concentrated in the U.S. Buffett assured that he believes in the American economy and fiat dollar in the long term, but hinted that he does not rule out hedging against currency risks in response to global challenges.
Historical Parallels and Buffett’s Fundamental Approach
The current strategy of Berkshire Hathaway largely reflects fundamental analysis and lessons from previous market cycles. Buffett has accumulated large amounts of cash at market peaks before. In the late 1960s, he dissolved his investment fund, feeling that available stocks were overvalued. In the late 1990s, Berkshire remained largely inactive in the overheated dot-com market, avoiding the bubble and subsequently seizing the opportunity to buy undervalued assets after its burst. Prior to the 2008 financial crisis, Buffett also maintained substantial reserves and minimized risks, allowing Berkshire to invest in several companies under favorable conditions during the height of the panic (e.g., Goldman Sachs and General Electric) and garner significant profits thereafter. Similarly, in 2020-2021, when markets were recovering from the pandemic, Berkshire was not in a hurry to exhaust all accumulated capital but instead invested selectively (in the oil and gas sectors and others), waiting for more obvious imbalances in valuations. Now, Buffett once again demonstrates his famous patience: investors observe Berkshire sacrificing short-term returns for the sake of capital preservation. This approach may seem conservative amidst a rising market, but it has repeatedly proven effective. Notably, Buffett's market indicator (the ratio of total stock market capitalization to GDP) is currently at one of the highest levels in history — similar to periods preceding previous corrections. This confirms Buffett’s viewpoint on market overheating. From a technical perspective, U.S. markets are currently highly valued relative to corporate profits and interest rates, with volatility and speculative sentiment increasing. But, as Buffett himself says, the stock market is a mechanism for redistributing money from the impatient to the patient. Berkshire Hathaway once again chooses to be patient.
Conclusion for Investors: Warren Buffett's business strategy for 2025 sends a clear signal to both institutional and private investors. In an environment where the stocks of many companies appear expensive and economic risks (inflation, debt issues, geopolitical tensions) loom ahead, it is prudent to adhere to the principles of fundamental analysis. Focus on the quality of businesses, maintain a sufficient amount of cash or equivalents for the opportunity to purchase assets in a downturn, and resist the temptation to chase euphoria at market peaks. Buffett exemplifies that discipline and a long-term strategy prevail: with record reserves and experience, Berkshire Hathaway is prepared to weather a period of potential correction or even upheaval to subsequently capitalize on emerging opportunities. For investors, this signifies the necessity to balance risk and protection, remain patient, and think ahead — just as the Oracle of Omaha does in this latest phase of the market cycle.
