Warren Buffett Prefers Treasury Bills as Berkshire Hathaway's Cash Grows

Berkshire Hathaway Inc. has seen a significant decline in share buybacks as Warren Buffett seems to favor 5% Treasury bills instead of repurchasing its own stock.

Recent Changes: In 2024, Berkshire's buybacks dropped to $2.9 billion, down from $9.2 billion in 2023 and $7.9 billion in 2022, according to finance expert Lawrence McDonald. This decline occurs as the company's cash reserves have skyrocketed nearly 300% since 2022, now totaling $334 billion in 2025.

McDonald emphasizes that "the rate of change" in the cash position is crucial. He noted that Berkshire’s cash hoard grew from $109 billion in 2022 to $277 billion in 2024, highlighting a remarkable increase.

Table of Buybacks:

2024: $2.9B
2023: $9.2B
2022: $7.9B

This trend raises questions about Buffett's priorities as he indicated a preference for Treasury bills over stock buybacks.

Understanding Buffett's Strategy

The 94-year-old Buffett addressed these changes in his recent letter to shareholders, reaffirming his loyalty to business ownership despite the record cash pile. He reassured investors that Berkshire would continue to invest most of its money in equities, primarily within the United States.

This substantial rise in cash reserves is also linked to the reduction of stakes in various companies, including Bank of America and Citigroup, with profits being redirected towards Treasury bills. Buffett cited the rising yields of Treasuries as a contributing factor but cautioned that fixed-coupon bonds lack protection against currency devaluation.

Berkshire's Market Outlook

Berkshire's shifting investment approach highlights current market dynamics and Buffett’s careful perspective. With U.S. stocks reaching record valuations, Buffett is finding it difficult to discover worthwhile acquisition opportunities. This challenge has led to an unprecedented buildup of cash equivalents, which diverges from his historical preference for acquiring businesses outright.

The landscape continues to evolve, and investors will be keen to see how Buffett maneuvers the growing cash reserves and changing market conditions.

Berkshire, Buffett, Treasury