Warren Buffett wasn’t thrilled about Berkshire Hathaway holding so much cash, and would have happily spent $100 billion on the right opportunity.
The famed investor voiced his frustrations to CNBC in an interview last May, which aired Tuesday night during a two-hour special titled “Warren Buffett: A Life and Legacy.”
Buffett, who recently stepped down as Berkshire’s CEO after more than 50 years in the role, said he couldn’t find any stocks or businesses that were attractively valued and large enough to move the needle at his $1 trillion conglomerate. Berkshire was only “buying one or two things, but it’s peanuts,” he said.
“But I’m willing to spend $100 billion this afternoon,” Buffett said, adding that he’d “rather have $100 billion in a really good business model at a sensible price than have $100 billion in cash.”
To give a sense of what that amount could buy, Nike, Moody’s, DoorDash, UPS, 3M, Marriott, and Airbnb all have market capitalizations below $100 billion.
Berkshire’s cash pile more than doubled to north of $300 billion over the course of 2024, and surged past $350 billion in the third quarter of last year.
Buffett said that holding some cash was necessary, comparing it to “oxygen” and saying you “always need to have it available because you do not know what will happen.”
But he said that “cash is not a good asset.” Buffett is known for preferring to own productive assets such as businesses that generate profits and can pay dividends, instead of assets that don’t produce anything, such as gold and bitcoin, or cash, which depreciates in value as prices rise.
Buffett emphasized that he doesn’t know what the stock market will do in the future, but he found investing to be an “interesting” game and learned “you couldn’t lose really if you followed the rules.”
He was likely referring to the key tenets of his investing style. Those include staying within his “circle of competence” by only investing in things he understands, ensuring he has an ample “margin of safety” to protect him if anything goes wrong, and treating a stock purchase as if he’s buying a piece of a business for the long term.
Buffett’s struggle to find bargains continued in his final months as CEO. Berkshire was a net seller of stocks for a 12th straight quarter in the three months ended September 30, suggesting a dearth of compelling buying opportunities.
Buffett also refrained from stock buybacks for the fifth quarter in a row, signaling that even Berkshire’s own shares didn’t strike Buffett as good value.
One coup was Berkshire’s deal to acquire OxyChem from Occidental Petroleum for nearly $10 billion in October. Berkshire announced the completion of the deal on January 2.
Buffett shocked the business world last May when he announced that he would step down as CEO at the end of the year. Greg Abel, Berkshire’s non-insurance boss and Buffett’s hand-picked successor, took over on New Year’s Day.