Warren Buffett’s decision to accumulate a record cash reserve of $325 billion—nearly 50% of Berkshire Hathaway’s portfolio—is drawing increasing attention from market analysts. Hedge fund manager Anurag Singh has now weighed in, supporting Buffett’s cautious approach in an uncertain economic environment. “Warren Buffett’s cash call of $325 billion makes sense after all,” Singh remarked in a recent post. “When stocks are pricing in too much optimism, all the risk lies with investors. Funds won’t teach you this—markets certainly will.” Berkshire Hathaway’s cash reserves climbed further to an all-time high of $334.2 billion by the end of 2024, up from $325.2 billion in the third quarter. While the conglomerate posted strong operating profits, particularly in its insurance business, what stood out to investors was its aggressive stock sell-off without reinvesting into equities.
Berkshire’s Shift from Stocks to Cash
Throughout 2024, Berkshire Hathaway significantly reduced its stakes in major holdings such as Apple and Bank of America. Instead of making new investments, Buffett chose to sit on cash, signaling a cautious stance amid concerns of market overvaluation and excessive risk-taking.
His decision aligns with broader warnings of a possible market downturn, with several analysts cautioning that equities may be overpriced and vulnerable to correction.
Warnings of a Major Market Crash
Singh’s remarks come at a time when market fears are intensifying. Prominent investor Robert Kiyosaki has predicted what he calls the “biggest crash in history.”
“The EVERYTHING BUBBLE is bursting,” Kiyosaki wrote in a recent post, adding, “I am afraid this crash may be the biggest in history.”
His concerns are reinforced by recent stock market declines:
- Nasdaq Composite plummeted over 4% in a single trading session.
- S&P 500 dropped 2.7%, extending an 8.5% decline from its all-time high in February.
- The S&P 1500 Supercomposite Index has erased nearly $4.9 trillion in market value since mid-February.
Kiyosaki attributes the economic instability to mismanagement in key economies like the United States, Germany, and Japan, warning that "incompetent leaders have led us into a trap... a giant crash."
Recession Fears Grow Amid Policy Shifts
Concerns over an impending recession are escalating, fueled by US trade policies and inflation risks. A recent Reuters poll of economists in the US, Canada, and Mexico found that 70 out of 74 experts believe recession risks have increased.
Goldman Sachs has already adjusted its 2025 US growth forecast downward, citing “more adverse tariff assumptions” alongside the growing threat of inflation.
With uncertainty clouding global financial markets, Buffett’s strategy of holding onto cash rather than chasing volatile investments is gaining widespread validation. His wait-and-watch approach could prove pivotal in navigating the next phase of the economic cycle.
