Buffett builds US$55b green pile as individual investors cut cash holdings
Large holdings allow Berkshire's boss to make an investment when the right deal comes along and give him protection against the downside
Individual investors have been cutting back on cash in portfolios, the exact reverse of what Warren Buffett has been doing at Berkshire Hathaway.
Who do you think has got it right?
Cash at Berkshire Hathaway stood at just over US$55 billion at the end of June, a record high and 21/2 times the level Buffett had said in the past he liked to keep on tap to meet extraordinary claims at his insurance businesses. It was also up more than 50 per cent year on year.
Buffett's green pile was in sharp contrast to individual investors, who had cut cash in portfolios to 15.8 per cent, a 14-year low, the July asset allocation survey from the American Association of Individual Investors showed.
Cash is the thing that puts you in a position to drive the ball and gives your investment swing power
To be sure, businesses and individuals hold cash for different reasons, but Buffett has used Berkshire, in part, as an investment vehicle through which we can interpret his views on markets, or at least the prices of some assets in them.