Berkshire Hathaway’s cash pile hits record as Warren Buffett dumps stocks

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Berkshire Hathaway’s cash pile soared to a record $334.2bn at the end of last year, as Warren Buffett dumped stocks and raked in billions of dollars in interest from the group’s vast holdings of Treasury bills.

Omaha-based Berkshire said on Saturday that its cash position rose by $9bn in the final three months of last year, as Buffett trimmed stakes in blue-chip US stocks, including multibillion-dollar sales of shares in Citigroup and Bank of America. The group’s cash pile has almost doubled over the past year.

The sprawling conglomerate reported operating earnings of $47.4bn for 2024, up 27 per cent from 2023, led by a stronger performance by its insurance business.

The operating results exclude changes in the value of Berkshire’s $272bn stock portfolio, swings which Buffett has long dismissed as largely meaningless.

Berkshire disposed of $143bn of stocks in 2024, far surpassing the $9bn it ploughed into equities, and put much of the proceeds into short-term Treasury bills.

Buffett’s dealmaking has been hit in recent years as the valuation of US stocks has hit record highs, making the large acquisitions that have long been a mainstay of the billionaire’s strategy harder to unearth.

The group’s fourth-quarter results were released along with Buffett’s closely followed annual letter to shareholders.

“In 2024, Berkshire did better than I expected though 53 per cent of our 189 operating businesses reported a decline in earnings,” Buffett wrote to shareholders. “We were aided by a predictable large gain in investment income as Treasury Bill yields improved and we substantially increased our holdings of these highly-liquid short-term securities.”

Berkshire’s increasing shift into US government debt has been a boon for Berkshire since the Federal Reserve began lifting interest rates in 2022. Last year, the company’s insurance subsidiary reported $11.6bn of interest income from its holdings of Treasury bills, comfortably exceeding the dividends it receives from its portfolio of stocks.

The 94-year-old investor told shareholders on Saturday that he did not mind the group’s growing cash pile, pointing instead to the rise in value of Berkshire’s nearly 200 operating subsidiaries, which includes the BNSF railroad, Dairy Queen ice cream purveyor and underwear maker Fruit of the Loom.

“Berkshire shareholders can rest assured that we will forever deploy a substantial majority of their money in equities,” he wrote. “Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses.”

The billionaire also warned of the danger to the value of a country’s debt and currency should “fiscal folly” prevail.

“Paper money can see its value evaporate if fiscal folly prevails,” he wrote. “In some countries, this reckless practice has become habitual, and, in our country’s short history, the US has come close to the edge. Fixed-coupon bonds provide no protection against runaway currency.”