Berkshire Hathaway’s Buffett explains for the first time the motivation behind its high cash position

After stepping down as CEO of Berkshire Hathaway, Warren Buffett gave an interview to CNBC, offering an explanation for the company’s current decision to hold about $400 billion in cash. He also commented on global economic conditions, the crisis caused by the rampant rise of today’s speculative mindset, and the “do not do to others what you would not want done to yourself” behavioral code that has supported his investing career for more than six decades.

Reasons for Berkshire Hathaway’s high cash reserves

Recent financial reports show Berkshire Hathaway’s holdings of cash and short-dated Treasury Bills have risen to nearly $400 billion. Buffett explained that this allocation is not driven by despair about market prospects, but by the difficulty of finding investment targets that deliver long-term value. He noted that throughout his career, truly rare investment opportunities with “golden age” characteristics appear extremely infrequently—on average, ideal buying windows come less than a year every decade. He said today’s stock market is like “a church with a casino,” with the speculative boom in short-dated options (Zero Days to Expiration, abbreviated as 0DTE), which runs counter to the long-term value-investor ethos in corporate intrinsic value. Therefore, maintaining liquidity is to enable an immediate response when markets fall into disorder.

How to view an unknowable future?

When discussing concerns from many economists that the stock market could collapse, Buffett believes that worrying about disasters is often useless, because genuine systemic collapses typically happen suddenly and cannot be predicted. He is skeptical of modern economic textbooks and academic models, giving an example: traditional textbooks such as Paul Samuelson’s work still failed to forecast the emergence of Zero Interest Rate Policy (the “zero interest rate” regime) even after decades of revisions. This disconnect between theory and reality reflects how the complexity of an economic system often goes beyond what textbooks define. He emphasized that the focus of risk management should be on understanding, not predicting abrupt market volatility.

Inflation response strategy

On the macroeconomic outlook, Buffett expressed trust in current Federal Reserve Chair Jerome Powell’s approach to dealing with inflation. He believes the U.S. has not yet entered an out-of-control inflation cycle. Berkshire’s hedging strategy is aimed at avoiding becoming a driver of inflation. In addition to financial risks, he specifically pointed to the challenges brought by technological progress, especially deepfakes. He worries that such artificial intelligence could be used to spread large-scale false information, posing a threat to social trust.

Looking back on his 95-year life and career, Buffett views the U.S.’ economic development as a unique miracle—despite economic inequality, its financial system remains highly attractive and resilient. In both running businesses and personal ethics, he has consistently followed the “golden rule,” “do not do to others what you would not want done to yourself.” He believes that this simple ethical standard applies not only to family education, but also as the foundation for building long-term business credibility. To him, this business philosophy provides a stable direction in turbulent markets, delivering more enduring returns and value than any complicated financial derivative tool.

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