November 23, 2024

Buffett’s $499b cash hoard is an early warning signal

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Berkshire Hathaway reported its stock holdings last week — a widely anticipated quarterly update of Warren Buffett’s latest trades. There were some notable ones, including the addition of Domino’s Pizza to Berkshire’s portfolio and more trimming of its stake in Apple.

But those moves have been overshadowed by Berkshire’s $US325 billion ($499 billion) cash hoard, nearly double the company’s cash balance at year-end, and the most Buffett has ever amassed. It also comes at a time when Buffett’s favourite valuation gauge — a ratio of the stock market’s value relative to the size of the US economy – is at a record high.

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