Buffett’s Historic Cash Build, He’s Prepared for the Storm

“There’s nothing in this world which will so violently distort a man’s judgment more than the sight of his neighbor getting rich.”

J.P. Morgan, 1907

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Reuters Jen Ablan reported today, Berkshire ended September with $84.8 billion of cash, despite having completed a $32.1 billion purchase of aircraft parts maker Precision Castparts Corp in January that was a key factor behind the boost in operating profit.  In an ominous change from policy, Buffett highlighted the cash hoard in Berkshire’s press release accompanying results.

That’s right, Buffett has $85 billion of cash earning nothing.   Berkshire is rich in firepower, ready for the next bloodbath.

Berkshire Cash Position

2016: $85B
15: $63B
14: $48B
13: $47B
12: $40B
11: $47B
10: $27B
09: $22B
08: $33B
07: $48B
06: $40B

If you look closely, you can see how Warren Buffett over time has become the richest man on earth.  Few investors sell complacency and BUY fear better.

From 2006 to 2007, he raised cash as the stock market crested, then aggressively deployed money into the most significant selloff in 80 years.

Over the last year, Buffett has an astonishing $22B cash build, Berkshire’s largest year-over-year accumulation of capital on record.  Lying in wait, Buffett has the patience of a fierce lion on the Serengeti plains.  Chase equity market rallies all you like, Buffett sits in the boat, waits for fear to come to him.  It’s the only way to invest.

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