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Berkshire Hathaway, the famous investment conglomerate run by Warren Buffett, has been wildly successful in buying stocks and entire companies for more than 50 years. But, for the last 10 years or so, Berkshire Hathaway has been putting its cash in the bank, instead of using it to do major deals.
Why not spend it?
The most obvious answer is simply that Warren Buffett and his team haven't seen a particular opportunity they liked enough. That itself could be because stock prices generally are at, or very close to, all-time highs. So stocks are expensive to buy, and Buffett is always looking for a bargain.
Indeed, even this week stock markets have been moving up to record levels thanks to reports that the US and China might be about to de-escalate the trade war, by respectively cancelling tariffs.
Another potential reason for why they've let the cash pile build up is its sheer size. With $128bn on the sidelines, they have enough money to buy almost any company in the US, with the exception of the 40-45 largest. Making sure you don't waste billions of dollars on bad investments isn't always easy (WeWork).
Business aside however, Buffett has already signed on the most impactful deal of his life with his pledge from 2006 to give 99% of his wealth to charitable causes. 💼
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