Warren Buffett’s Cash Strategy Proves Justified, Says Hedge Fund Manager
Berkshire Hathaway’s cash reserves surged to a record $334.2 billion by the end of 2024, up from $325.2 billion in the third quarter.
Warren Buffett’s decision to hold onto an unprecedented $325 billion in cash is drawing significant attention from market analysts. On Thursday, hedge fund manager Anurag Singh supported Buffett’s cautious stance, stating, “Warren Buffett’s cash call of $325 billion—about 50% of Berkshire’s portfolio—makes sense after all. When stocks are priced with excessive optimism, the real risk falls on investors. Funds won’t teach you this, but markets certainly will.”
Berkshire Hathaway’s growing cash pile, alongside strong operating profits—particularly in its insurance business—has intrigued investors. However, what stood out was the company’s aggressive stock sell-off without reinvesting in equities.
Throughout 2024, Berkshire trimmed its holdings in major companies like Apple and Bank of America but chose to sit on cash instead of making large new investments. This move signals Buffett’s cautious market outlook, aligning with concerns that equities may be overvalued and increasingly risky.
Singh’s remarks come amid growing warnings of a potential market downturn. Investor Robert Kiyosaki recently predicted what he calls the “biggest crash in history.” In a post on X, he cautioned, “THE EVERYTHING BUBBLE is bursting. I fear this crash may be the biggest in history.”
Kiyosaki’s concerns are reinforced by sharp market declines. The Nasdaq Composite recently dropped more than 4% in a single day, while the S&P 500 fell 2.7%, extending an 8.5% decline from its all-time high in February. Meanwhile, the S&P 1500 Supercomposite Index has erased nearly $4.9 trillion in value since mid-February, deepening investor anxiety.
Kiyosaki attributes the crisis to economic mismanagement in major economies, stating, “Incompetent leaders have led us into a trap… a giant crash.” He also referenced his book, Rich Dad’s Prophecy, in which he previously predicted a severe market collapse.
Concerns over a potential recession are escalating, driven by U.S. trade policies and inflation risks. A Reuters poll of economists from the U.S., Canada, and Mexico found that 70 out of 74 experts believe recession risks have increased. Goldman Sachs has already lowered its 2025 U.S. growth forecast, citing “more adverse tariff assumptions” along with rising inflation threats.
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Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.
