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Warren Buffett’s Berkshire Hathaway (BRK-A) is holding roughly $400 billion in cash and Treasury equivalents, the largest idle war chest in corporate history.

That’s not merely prudence. When the world’s most successful value investor refuses to deploy capital despite sitting on record earnings, it’s a red flag for markets that may be overvalued and vulnerable to a significant correction.

Buffett has systematically raised cash from $100 billion in early 2023 to nearly $400 billion today, a quadrupling that reflects his dimming appetite for stocks at current prices.​

This matters because Buffett’s cash fortress is more than a balance-sheet detail; it’s a signal about market breadth, valuation levels, and the opportunity cost of remaining deployed in speculative sectors.

Investors should understand what Buffett’s hoarding means for their own portfolio risk.

Why Warren Buffett is hoarding cash
 

Berkshire’s massive cash buildup reflects a deliberate strategy rooted in Buffett’s value discipline.

The company reported $381.7 billion in cash and equivalents as of the third quarter of 2025, with the majority, approximately $305 billion, sitting in short-term US Treasury bills yielding just 3.6% annually.

That’s a telling choice.

By opting for risk-free Treasuries over stock exposure, Buffett is essentially signaling that he does not expect equity returns to exceed that 3.6% rate, barely above inflation levels.​

The context amplifies the concern. Berkshire has been a persistent net seller of stocks over the past three years, despite the company’s operating earnings surging 34% in the most recent quarter.

The firm did not repurchase any of its own shares for the fifth consecutive quarter, another sign of capital caution.

Buffett has also significantly reduced Berkshire’s massive Apple position, which fell from roughly $200 billion to around $60 billion in the portfolio.​

Buffett’s playbook is consistent with his famous maxim: “Be fearful when others are greedy.”

The “Magnificent Seven” AI-driven mega-cap stocks are trading at price-to-earnings ratios exceeding 30 times forward earnings, while the broader S&P 500 sits near record-high valuations.

Opportunities that meet Buffett’s criteria, companies trading at a discount to intrinsic value, appear scarce.

Rather than compromise on valuation standards, Buffett is choosing to wait.

Berkshire’s cash reserves also serve a practical function: they provide dry powder for acquisitions and buybacks if markets correct or if compelling opportunities emerge.​

What investors should do next?
 

The lesson for individual investors is not to liquidate entire stock holdings. Buffett’s position reflects Berkshire’s unique situation, a 95-year-old company with fewer years of deployment runway than most investors have.

But Buffett’s message warrants a serious portfolio review, particularly for those overexposed to high-valuation sectors.

The investors must start by auditing concentration.

If your portfolio is heavily weighted toward AI, mega-cap tech, or momentum names trading at 30-plus times earnings, consider trimming positions on strength.

Rebalance aggressively into higher-quality companies with dividends, defensive sectors such as utilities or healthcare, and short-term bonds that are now yielding attractive 3.5-4% returns with minimal risk.

A staged reduction is smarter than panic selling; deploy proceeds into value-oriented opportunities or hold them in cash as dry powder for market weakness.​

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