Warren Buffett must be feeling pretty smug right about now. Months before the American stock markets started going downhill from their record highs in late February, and as investors began to question President Donald Trump’s handling of the economy, the ninety-year-old billionaire was busy selling off his equities. In 2024, his company Berkshire Hathaway unloaded a net $134bn worth of stocks, including a whopping two-thirds of its $174bn stake in Apple. By the end of March, the S&P 500 index had dropped by 9% from its peak, along with Apple. Meanwhile, Berkshire was sitting pretty on a 10% gain and a massive pile of cash that would make Scrooge McDuck jealous. If you converted their $334bn in liquid assets into $100 bills, you could fill 1,900 king-size mattresses. The internet was abuzz with memes about Buffett’s seemingly supernatural market timing.
Cash is king, but is it really necessary for every business to have a pile of it like Warren Buffett’s? Despite the impressive gains and financial cushion that Berkshire Hathaway now enjoys, the question remains whether all companies should follow suit. Apple, on the other hand, is still facing a potential nightmare with the ongoing trade war. With tariffs looming and the possibility of costs skyrocketing, many firms are left wondering how to navigate these choppy waters. Meanwhile, in the world of luxury, Hermès has managed to defy the slump that has affected many other high-end brands. And let’s not forget the bizarre sale process of TikTok, or Amazon’s ambitious push into orbit targeting SpaceX and China. Biohacking in the office is also gaining traction, raising questions about the future of work. With so much happening in the business world, it’s hard to keep up with the ever-changing landscape.
Not really sure why this matters, but the key takeaway here is that having a substantial cash reserve like Warren Buffett can be a game-changer in times of market volatility. While some may argue that it’s not necessary for every business to hoard cash, there’s no denying the security and flexibility it provides. As the world economy continues to face uncertainties and challenges, having a financial buffer could mean the difference between surviving or thriving. So, whether you’re a tech giant like Apple or a traditional conglomerate like Berkshire Hathaway, having a cash pile to fall back on might just be the smartest move you could make.
