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Warren Buffett's Berkshire Hathaway Accumulates Record $157 Billion in Cash and Treasuries

21/11 05:14
According to Yahoo News, Warren Buffett's Berkshire Hathaway has accumulated a record $157 billion in cash, Treasury bills, and other liquid assets, preparing to capitalize on potential economic turmoil, says Steve Hanke, a professor of applied economics at Johns Hopkins University. The company's cash pile has grown by nearly $50 billion in the past 12 months, partly due to Buffett and his team selling $5 billion of stocks on a net basis last quarter. Hanke believes that Buffett is anticipating troubled economic waters and is positioning himself to take advantage of potential bargains and attractive deals. The Berkshire CEO has a history of profiting from lending to and rescuing distressed financial institutions during economic downturns. During the financial crisis, Berkshire deployed $21 billion across five transactions in just 18 months, striking lucrative deals with Goldman Sachs, General Electric, Mars, Dow Chemical, and Swiss Re. Additionally, Berkshire earned over $4 billion of interest, dividend, and investment income last quarter, a 70% increase from the third quarter of last year. This increase was partly due to the Federal Reserve raising its benchmark interest rate from nearly zero to over 5% since last spring, boosting Berkshire's returns from its Treasuries. Hanke suggests that Buffett's cash build-up positions him well to purchase discounted stocks and businesses and lend money at attractive rates if the economy falters. Meanwhile, he'll continue to earn a solid return with minimal risk thanks to higher bond yields. Other commentators, such as Portfolio Wealth Advisors chief Lee Munson, also view Buffett's growing cash reserves as a cautionary sign for investors, indicating that he may not see any attractive deals currently available.