Investing

Warren Buffet Hasn't Had This Much Cash Since the Last Financial Crisis

Austin Smith

Published: February 28, 2025 9:47 am

24/7 Wall St. Key Points:

• Berkshire Hathaway (NYSE: BRK.A) reported a 71% surge in fourth-quarter earnings, largely driven by its insurance operations, including GEICO.
• Buffett has amassed a record-high cash reserve of approximately $320 billion, the largest since before the 2008 financial crisis, signaling potential caution about market conditions.
• Despite being a net seller of stocks in 2023, Buffett expanded positions in Constellation Brands (NYSE: STZ), Diageo (NYSE: DEO), Occidental Petroleum (NYSE: OXY), and Domino’s Pizza (NYSE: DPZ), indicating selective sector confidence, particularly in alcohol and energy.
• If a crisis is around the corner, make sure you speak to a financial advisor and make sure you’re positioned to weather the storm. Smart Asset can connect you with 3 serving your area in just a few moments. Click here to get started (sponsor)

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Transcript:

[00:00:04] Doug McIntyre: So Lee, Warren Buffett just put out his annual letter. Yeah. Which may be the most read document in the financial world over the course of. year. So a, what did he h B. Why were his earnings he still have so much cash, so that’s an ABC.

[00:00:30] Lee Jackson: It’s interesting. It w- I was one of the people that did read that letter. It’s not that long, you know, 14, 15 pages

[00:00:37] Lee Jackson: One thing I thought was very interesting is they had a incredible fourth quarter, you know earning We’re like 71 percent higher, you’re right about the cash. He’s raised that cash level. I saw two different numbers. I saw 235 billion and I saw 341 billion. So

[00:00:56] Doug McIntyre: Yeah,

[00:00:57] Lee Jackson: Whatever it is. It’s a ton and it was interesting if you read the letter, he didn’t really comment as much on you know his stock holdings as much as he seemed to comment on the holdings he has in Japan. Which are financials and he talked a fair amount about piling into the he still prefers stocks over cash, but he’s got that big pile of cash

[00:01:27] Doug McIntyre: Yeah, I’m reading his, letter while we’re talking.

[00:01:31] Doug McIntyre: It’s 320 billion, but the thing where it’s not really clear what he wants to do is he didn’t say anything about the market being overheated, which very often he does. So on the one hand, he didn’t complain. That the market was way too high, but on the other hand, he didn’t explain why he has all that cash.

[00:01:51] Doug McIntyre: So I read the thing. I’m sort of confused, but he’s Warren Buffett. And, you know, I’m not

[00:01:59] Lee Jackson: Well, actually, a friend and I are going to Omaha in early May to go to the shareholder meeting. So maybe I can give a live report from there. But yeah, I thought it was interesting how Despite the just the incredible numbers.

[00:02:16] Lee Jackson: He was really a net seller of stocks last year he added stars in a pretty big way, you know, which is Constellation They’re the Modelo and they make Corona, the big Mexican beer that people seem to like I don’t. No, if it’s still as popular as it was, but he also owns a pretty hefty position in Diageo.

[00:02:38] Lee Jackson: So he owns two of the biggest liquor and beer companies out there. That tells you something. And other than adding a little bit of Oxy last year, adding some dominoes, which came out with some kind of weak numbers recently, this week, actually. And, it, it seems like he’s still just biting his time.

[00:03:00] Doug McIntyre: Yeah, but for what? He’s 95 years old. Soon enough.

[00:03:08] Lee Jackson: Well, it’s it’s interesting, that cash pile that he has done is the highest that he’s had since, right before the 2008 meltdown. He hasn’t had this much cash since then, which is kind of interesting because he has to see something coming.

[00:03:27] Doug McIntyre: All I can say is there’s no reason for him to hold that much cash unless he’s anxious about the future.

[00:03:34] Lee Jackson: Oh, absolutely. I mean, that’s a huge amount of cash and he still has, you know, big concentrated positions, but I, one of the things I did see that was a huge contributor to that massive earnings in the fourth quarter was the insurance.

[00:03:50] Lee Jackson: side, you know, they always know, you can’t, you can you can’t afford not to h it pays off for him. Booth GEICO, and other insurance entities that Berkshire owns. But apparently that drove a lot of that revenue growth.