Warren Buffett's Company's Cash Reserves Reached $325 Billion, Marking the Peak In Three Decades
Go Wire
December 25, 2024
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Warren Buffett's Berkshire Hathaway Inc. has obtained its highest cash reserve level in over 30 years as 2025 approaches.
Berkshire Hathaway's cash positions have reached $325 billion, representing the largest portion of total assets since 1990, according to CNBC Tuesday's report. Such cash storage results from few engaging investment opportunities in an overvalued market.
As stated by Oppenheimer data, the “Buffett Indicator,” which compares total U.S. stock market capitalization to gross domestic product, jumped to 209%, matching the market's peak level in 1929.
In 2024, Buffett heavily sold off his largest stock holdings, such as Apple $AAPL and Bank of America $BAC/PS. In the first three quarters, he dumped $133 billion in shares. Nevertheless, Berkshire's stock has a cumulative gain of 27% in 2024, giving the best performance since 2021.
Buffett's strategy may favor awaiting major acquisition opportunities to benefit his successor, Greg Abel. Kevin Heal, an analyst at Argus Research, added that a portion of cash could be used for troubled investments, providing an opportunity for his successor to succeed.
This huge cash reserve enables Berkshire Hathaway to make strategic deployments in the coming years. More recently, Buffett has changed his investment activities. In December, Berkshire significantly increased its holdings in Occidental Petroleum Corporation $OXY, buying about 8.9 million shares. The total value of the stock was about $405 million, raising Berkshire's stake in Occidental Petroleum to 28%, worth about $12 billion.
#$Apple Inc.(AAPL)#$Bank of America Corporation Depositary shares each representing 1/1 000th interest in a share of 4.750% Non-Cumulative Preferred Stock Series SS(BAC/PS)#$Occidental Petroleum Corporation(OXY)#$Berkshire Hathaway Inc.(BRK.A)