Warren Buffett, renowned as one of the greatest investors of all time and CEO of Berkshire Hathaway, has once again made headlines by accumulating a staggering $234.6 billion in short-term U.S. Treasury bills (T-bills). This strategic accumulation has positioned Berkshire Hathaway ahead of the Federal Reserve, which holds approximately $195 billion in T-bills, marking a significant milestone in the financial world.
Berkshire Hathaway’s recent earnings report revealed a dramatic increase in its T-bill holdings, up from $130 billion at the end of the previous fiscal year. These Treasury bills, with maturities ranging from four to 52 weeks, are backed by the U.S. government and are exempt from state and local taxes, making them particularly attractive to large investors like Berkshire.
Buffett’s aggressive acquisition of T-bills reflects a cautious investment approach amid ongoing market uncertainties, especially given the federal funds rate’s elevated levels. During Berkshire’s annual meeting in May, Buffett highlighted the benefits of holding cash and equivalents over navigating volatile financial markets. He noted that while stocks can potentially offer higher returns, they also come with greater risks of capital loss. In contrast, T-bills provide a safer investment option with lower but more stable returns.
In addition to increasing its T-bill investments, Berkshire Hathaway has also reduced its stake in Apple by about 50%, lowering the value of its holdings to $84 billion. Despite this reduction, Apple remains Berkshire’s largest stock investment, significantly outpacing its next largest holding, Bank of America, which is valued at $41 billion.
Financial analysts view Buffett’s strategy as a classic move that prioritizes safety and capital preservation during uncertain economic times. Berkshire’s record cash reserves, which totaled $277 billion at the end of the last quarter, further underscore this cautious approach, setting the company apart in the U.S. financial landscape.
As the investment community watches Buffett’s T-bill strategy, the long-term implications of this significant investment remain to be seen. However, it clearly underscores Berkshire Hathaway’s distinctive position in the market, outpacing even the Federal Reserve in T-bill holdings.
