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Nobody knows what the market's going to do tomorrow, next week, next month. Nobody knows what business is going to do. Very occasionally, but it will happen again. We will be bombarded with offerings that that we'll be glad we have the cash for. Warren Buffett, who's widely considered the most successful investor of all time, just had his Berkshire Hathaway annual meeting where he takes questions from the audience and media.
They also just revealed their latest quarterly results for their cash and short-term cash equivalents hit a record high of $347.7 billion. You heard me right, nearly $350 billion. This was also the 10th consecutive quarter where Berkshire Hathaway was a net seller of stocks, meaning they were selling more than they were buying during the quarter.
But let's not forget they still have a massive public stock portfolio with some of the highest quality companies in the world like Apple, American Express, Coca-Cola, Bank of America, Chevron, Moody's, Occidental Petroleum, et cetera. They also have a ton of fully owned private companies like their insurance business, which includes giant companies like GEICO.
They also own the BNSF Railway, which is a huge company that he bought in the great financial crisis. And Berkshire Hathaway Energy is one of the largest utility companies in the entire United States. And I'm bringing that up to add some context here that Berkshire Hathaway is not in any way out of the market.
They are still heavily invested in the US economy. But Berkshire Hathaway continues to have cash coming in and this cash pile now sits at a record high amount. So of course that was a big question being asked to Warren at the annual meeting. So today I'm going to provide Warren Buffett's answer explaining exactly why they have such a large cash position and whether or not they plan to buy.
It should be noted this is as of Q1 2025 which ended March 31st, so before we had this 2025 sell-off. So all that April volatility could have created a potential opportunity for them to buy. But, from what I've watched in the meeting so far, Warren has not mentioned that they've had any large purchase.
So, after Warren explains his thoughts on the large cash position, I'm then going to bring up a question where he was asked about investing in the United States and whether or not in 2025 with all the tariff trade wars and everything, if he thinks the US is still a good investment. And as always, he gives the long-term thought-out perspective.
And if we stick around to the end of the video, I'll give my brief thoughts and analysis on Berkshire Hathaway stock and explain why it's been such a successful investment and why it will likely continue to be in the decades following Warren Buffett's leadership. With that said, let's roll the intro and jump into the analysis.
My name is Zach. This is Dividend Data and you should leave a like and subscribe to the channel if you enjoyed the video. So, here's the clip from Warren Buffett talking. Berkshire holds over $300 billion in cash and short-term investments representing about 27% of total assets, a historically high figure compared to the 13% average over the last 25 years.
This has also led Berkshire to effectively own nearly 5% of the entire US Treasury market. Beyond the need for liquidity to meet insurance obligations, is the decision to raise cash primarily a de-risking strategy in response to high market valuations, or is it also a deliberate effort to position Berkshire's balance sheet for a smoother smoother leadership transition providing Greg Abel with maximum flexibility and a clean slate for future capital allocation decisions.
And I will add one line from another shareholder, Mike Conway, who asks, "Are you encouraged you may see some fat pitches coming your way?" Yeah. Well, I wouldn't do anything nearly so noble as to withhold investing myself just so that Greg could look good later on. Now, if he if he gets any edge when I leave, I'll resent it.
So, the uh Now, the the amount of cash we have is uh we we we would spend Well, we wouldn't. We've came pretty close to spending 10 billion not that long ago, for example. Uh But, we'd spend 100 billion. I mean, and and and those decisions are not tough to make. Uh when when something is offered that is that uh makes sense to us and that we understand and uh offers good value and where we don't worry about losing.
And the one problem with the investment business is that things don't come along in an orderly fashion and they never will. I mean, it isn't like every day uh you know, the the Wall Street record is sensational. But, that is not a product. And I've been in See, I've had uh 200 trading days times 80 years.
I mean, I've made 60,000 trading days. It it would be nice if every day you got four opportunities or something like that and you know, you could and they were expected to be equally attractive. Charlie always thought I did too many things. He thought if we did about five things in our lifetime we we could we could we did up doing better than if we did 50 and and and that we never concentrated enough.
So that we would rather have if we got 335 billion now in charges we would rather have conditions that have developed where we would have like 50 billion or something like that. But that that just isn't the way the business works. And we have made a lot of money by not wanting to be fully invested at all times.
And we don't think it's improper actually for people who are passive investors just to make a few simple investments and sit with their life sit for their life in them. But we've made the decision to be in the business so we think we can do a little better than that by behaving in a very irregular manner.
But if you told me that I had to invest well I let's say that we have a roughly 40 billion a year coming in and we start with 335. If you told me I had to invest 50 billion every year till we got down to 50 billion, that would be the dumbest thing in the world to invest in that manner. Things get extraordinarily attractive very occasionally.
The long-term trend is up. Nobody knows. And uh I certainly don't know. Greg doesn't know. Ajit doesn't know. Nobody knows what the market is going to do tomorrow, next week, next month. Nobody knows what business is going to do tomorrow, next week, or next month. But they spend all their time talking about it because it's it's easy to talk about.
Occasionally. Very occasionally, but it'll happen again. And uh I don't know when. It won't It could be next week. It could be 5 years off, but it won't be 50 years off. You will have We will be bombarded with offerings that that uh we'll be glad we have the cash for. And it'd be a lot more fun if it would happen tomorrow, but it's very unlikely to happen tomorrow.
Very, very unlikely to happen tomorrow. But it's not unlikely to happen in 5 years. And then it gets The probabilities get higher as you go along. It's kind of like death. I mean, if you're 10 years old, the chances that you're going to die the next day are are low. If you get to be 100 and 50 or something like that, it's almost a cinch.
Particularly if you're a male. I mean, all the records are held by females in terms of age and the I tried to get Charlie to have a sex change so he could test out one And And uh He did pretty well for being a male. I'll put it that way. Okay. Well, that Charlie sex change joke was pretty funny. When I saw that earlier, I was like, "Oh, I have to put that in the video." But my main takeaway from that clip is that when you're playing at the level of Berkshire Hathaway, where they have hundreds of billions of dollars, and to really move the needle with an investment, it probably needs to be a business they wholly own for hundreds of billions of dollars.
Opportunities like that really do not come along that often. And Berkshire Hathaway right now is set up to be one of the most financially stable companies in the entire world. So, if at any time there's some kind of US financial crisis or global financial crisis, which it will likely be both, if that happens at any time, Berkshire Hathaway will be one of the top companies to be able to take advantage of that.
And despite all of this volatility in April 2025, the market and really just the economy in general were still doing very good in the grand scheme of things. I mean, if we take a look at Berkshire Hathaway stock, they're trading at basically all-time highs, a $1.16 trillion market cap. The company has great earnings, their financial strength is fantastic.
So, personally, I would be a little surprised if Warren made a huge acquisition in this April period. It could have happened, but a lot of the best deals were in some of those big tech companies that I talked about on the channel like Alphabet, but those companies really don't fit the criteria of anything Warren Buffett is looking to invest in.
He famously avoids tech, especially if it's subject to a lot of change like AI. There's no way he's going anywhere near anything AI right now. He wants companies that are going to provide reliable cash flows for decades to come. And purely in terms of technology, there could be a lot of change in those categories.
But with all the trade war news and global power struggles, Warren Buffett is still a very big believer in the United States over the long term. And he was asked a question during the annual meeting about whether he still believes in buy America. Here's what he had to say about it. You've long been a strong believer in the American tailwind and the resilience of the United States, and history has proven you correct.
Today, the US appears to be undergoing significant and potentially revolutionary changes. Some investors are now questioning the concept of American exceptionalism. In your view, are investors being overly pessimistic about the US economy, or is the country indeed entering a period of fundamental change that requires a reassessment from a new perspective?
America's been in significant and revolutionary change really ever since it was developed. I mentioned that you know, we started out as an agricultural society. We started out as a society with with high promises and we didn't deliver on it very well, have we? We said all men were created equal and and then we didn't do something about it for a long time.
So, we're always in the process of change. We'll always find all kinds of things to criticize uh in the country, but the luckiest day in my life was the day I was born, you know, because I was born in the United States and at the time about 3% of all the births in the world were taking place in the United States.
And uh I'd like to say that I had something to do, you know, listen, so send messages out to my parents, for God's sake, move to the United States before I born or anything, but I was just lucky. And I was lucky to be born male, I was lucky to be born white, I was lucky to have all kinds of things. But it's been If you don't think the United States is easy since I was born in 1930, it's been We've gone through all kinds of things.
And gone through great recessions, we've gone through world wars, we've gone through the development of the atomic bomb that uh we never dreamt of, you know, at the time I was born. So, I I would not get discouraged about the fact that that it never does look like it we've solved every problem that's come along.
And uh uh if I were being born today, you know, I would just keep negotiating in the womb until they said you can be in the United States. So, it's we're all pretty lucky. I couldn't agree more with anything he said. Fantastic long-term perspective. I live in the USA, very thankful that I was born here.
I'm fairly confident about the long-term prospects of the country. My entire stock portfolio is basically concentrated in the United States. I mean, many of them are global businesses and have this global business interests, but they're US companies. And frankly, most of the best businesses in the world are US businesses.
So, when I think about investing in opportunity costs, I don't really see any better opportunities than investing in the United States and US businesses. And speaking of that, you have a great example of one here, Berkshire Hathaway Inc. This is Warren Buffett's company and it's one of the best investments you could have made at any time.
And in every single one of Warren Buffett's annual letters, he puts Berkshire Hathaway's performance versus the S&P 500. And of course, that's the S&P 500 with dividends reinvested. If you scroll down, you can see since he took over control of Berkshire Hathaway in 1965, the company's stock has grown at a compound annual growth rate of 19.9% versus the S&P 500 at 10.4% and that's a pretty big difference in annual gains.
But when you play that out over decades, the difference in overall gain is absolutely insane. The overall gain for Berkshire Hathaway stock is 5.5 million percent versus the S&P 500 at 39,000%. So, this is really just an example of long-term compounding at work. And when we look at the business of Berkshire Hathaway, it's really set up to just be a compounding machine.
They own all of these private businesses and public stocks and the companies pay their profits back to Berkshire Hathaway, the holding company. And the and the stocks they own pay dividends to them at the holding company. And then they reinvest that capital to buy more businesses, which in turn pay them more money in the future, and it's a snowball effect of compounding.
And they own incredibly reliable, high cash flow businesses that slowly grow over time. And people are often worried about, "Oh, when Warren Buffett dies, you know, what's going to happen to Berkshire Hathaway?" But the reality is that the company has evolved far past just Warren Buffett, and at this point, it's a large conglomerate of many of the best businesses in the world.
And all of those businesses are independently run and operated outside of the holding company. So, all of their assets will remain and continue to be incredibly valuable in the future. And then Warren Buffett's chosen successor, Greg Abels, has a big background in the Berkshire Hathaway energy business.
And right now, and probably until Warren Buffett passes, he will likely be kind of cooperating it with Warren. So, if I had to take a bet on any company in the S&P 500, so one of the largest businesses in the US, of which one will be around 100 years from now, my answer now, and probably for the rest of my life, is probably going to be Berkshire Hathaway.
And really, it's one of the most impressive businesses ever. So, with that said, I'll wrap up this video. Thank you for watching, and if you enjoyed, leave a like, subscribe to the channel, and I'll see you in the next one.
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