Warren Buffett, renowned for his value-oriented investment strategy, has amassed a record $348 billion in cash, equivalents, and U.S. Treasury bills on Berkshire Hathaway’s balance sheet as of March 31. This significant cash position reflects Buffett’s struggle to find attractive buying opportunities despite the S&P 500 entering correction territory in March. Berkshire reported $3.2 billion in stock purchases and $4.7 billion in stock sales during the first quarter, marking the 10th consecutive quarter as a net seller of stocks. Historically, the S&P 500 has performed worse following quarters when Berkshire was a net seller, averaging 12% returns compared to 20% when Berkshire was a net buyer. While this may signal caution, investors should consider Berkshire’s size limitations, which restrict its ability to invest in smaller companies. Despite the current market conditions, historical data suggests the S&P 500 tends to recover strongly after corrections, offering potential opportunities for those focused on reasonably priced high-conviction stocks.
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