At Berkshire Hathaway, cash has swelled to levels that dwarf the market capitalizations of many household-name companies. Estimates put the pile near $400 billion, much of it parked in short-dated U.S. Treasuries.
Berkshire didn’t wake up one morning and decide to sit on mountains of cash. The buildup has been gradual, accelerating alongside the bull market that began in earnest for the past two years.
For long-term investors trying to read the market’s temperature heading into 2026, Berkshire’s cash hoard may be the clearest warning sign available.
Key Positions
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Berkshire’s near-$400 billion cash hoard suggests stocks offer poor risk-adjusted returns versus Treasuries today.
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Buffett has raised cash before major market downturns when valuations and speculation were high.
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He’s not predicting a crash, but cautioning against leverage and frothy bets as 2026 approaches.
A cash position that tells a story
Much of that liquidity didn’t come from obscure side bets. It came from trimming proven winners. Berkshire steadily reduced its once-dominant stake in Apple, which at its peak represented close to $200 billion of Berkshire’s portfolio value and now sits far lower.
A modest position in Alphabet aside, Buffett has largely avoided the sector dominating headlines and capital flows. What’s especially telling is where that cash is sitting. Berkshire is content earning roughly 3.5% to 4% in short-term Treasuries.
For a firm with access to virtually any asset in the world, that’s a powerful statement. It suggests Buffett doesn’t currently see enough opportunities offering returns that clearly beat a risk-free yield, a rare stance during a euphoric bull market.
Buffett has seen this movie before
In the late 1960s, as speculative growth stocks surged, Buffett shut down his investment partnership and returned capital to investors. Over the next several years, the market delivered some of its worst real returns in modern history.
What many investors miss is that Buffett rarely tries to time exact tops. He doesn’t need to. His edge comes from recognizing when expected returns are poor relative to risk. Today, that setup looks familiar. The S&P 500 is trading near historically elevated valuation multiples. Buffett is acknowledging that the margin for error is thin.
Why this matters heading into 2026
Berkshire’s situation isn’t the same as that of a typical investor. Buffett can’t dollar-cost average fresh wages into the market the way individuals can. When he deploys capital, it has to move the needle, and that’s increasingly hard at today’s prices.
Still, his actions carry a broader lesson. When the most patient capital allocator in history prefers Treasury bills to equities, it’s a reminder that stocks don’t only go up, and that risk is often hiding where optimism is loudest.
This is especially relevant for investors leaning heavily on leverage, options, or concentrated bets in speculative tech names. In a correction, those strategies tend to unwind faster than expected. Berkshire’s fortress-like balance sheet ensures it won’t be forced to sell at the wrong time. Many individual portfolios don’t have that luxury.
The real takeaway
Buffett’s record cash position isn’t a call to sell everything or hide under a desk waiting for a crash. It’s a signal about discipline.
He’s choosing patience over excitement, liquidity over headlines, and optionality over bravado. If better opportunities emerge, as they always do eventually, Berkshire will be ready. If they don’t, earning a modest return while avoiding permanent capital loss is still a win.
As Buffett prepares to hand the reins to the next generation, this may be his final lesson to investors: when markets feel effortless and everyone believes a new era has arrived, the smartest move is often to do less, not more.