5%+

Cash is King!

Buffett Invests in T-bills instead of Stocks, Waits for Bad Stuff to Happen, Cash is King at 5%-plus

by Wolf Richter • May 6, 2024

Treasury bills are now all the rage at Berkshire Hathaway. They have been earning between 5.0% and 5.5% since mid-2023, and Warren Buffett decided they’re a great deal, rather than stocks at current prices, and loaded up on them.

Excluding the amounts held by “Railroad, Utilities and Energy” companies, total T-bills and cash jumped to $182 billion, and Buffett said at the shareholder meeting that it was “a fair assumption” that it would grow to $200 billion by the end of June, and that he was “quite satisfied” with that position. Cash is king.

“I don’t think anyone sitting at this table has any idea how to use it [the cash] effectively, and therefore we don’t use it,” Buffett said.

“We’d love to spend it, but we won’t spend it unless we think we’re doing something that has very little risk and can make us a lot of money,” he said.

When Buffett gets unexcited about stocks, dark-ish about their potential, waits for them to drop, dumps a big pile of Apple, and invests in T-bills — and explains why — suddenly no one takes him seriously anymore.

J. Paul Getty Quote!

"For as long as I can remember, veteran businessmen and investors - I among them - have been warning about the dangers of irrational stock speculation and hammering away at the theme that stock certificates are deeds of ownership and not betting slips.

The professional investor has no choice but to sit by quietly while the mob has its day, until enthusiasm or panic of the speculators and non-professionals has been spent. He is not impatient, nor is he even in a very great hurry, for he is an investor, not a gambler or a speculator. There are no safeguards that can protect the emotional investor from himself."