A key question surrounding Berkshire Hathaway is Warren Buffett’s decision to maintain a substantial cash reserve. During Berkshire’s annual shareholder meeting, Buffett addressed rumors that he was stockpiling billions for his successor, Greg Abel, to invest after he steps down.
“I wouldn’t do anything nearly so noble as to withhold investing myself just so Greg could look good,” Buffett joked, drawing laughter from the audience. Berkshire’s cash reserves surged to over $300 billion last year and reached a record high of nearly $348 billion in the first quarter of this year. This increase was partly due to the sale of two-thirds of Berkshire’s Apple shares, though Buffett still praised Apple CEO Tim Cook.
Buffett expressed willingness to spend significant amounts—up to $100 billion—if the right opportunity arises, provided it offers long-term value. However, high valuations in public stocks, private businesses, and even Berkshire’s own stock have limited his ability to make such investments. Ideally, Buffett would prefer Berkshire to hold only $50 billion in reserve if enough attractive opportunities were available. He emphasized that investing $50 billion annually just to reduce the cash pile would be unwise, as quality investment opportunities arise infrequently. Buffett also noted that he might have already been too active in the market in previous years.
— new from Business Insider