Cash pile at $183B + and growing
He is also skeptical of China involvement or exposuse. Sold TSMC, BYD and Apple.
I also feel that he says he does not look at macro but he has mentioned this in his last AR.
He said this last year in his AR
Some Surprising Facts About Federal Taxes
**During the decade ending in 2021, the United States Treasury received about $32.3 trillion in taxes while it spent $43.9 trillion.
Though economists, politicians and many of the public have opinions about the consequences of that huge imbalance, Charlie and I plead ignorance and firmly believe that near-term economic and market forecasts are worse than useless. Our job is to manage Berkshire’s operations and finances in a manner that will achieve an acceptable result over time and that will preserve the company’s unmatched staying power when financial panics or severe worldwide recessions occur. Berkshire also offers some modest protection from runaway inflation, but this attribute is far from perfect. Huge and entrenched fiscal deficits have consequences.*
My sense is that Buffett is wrong.
In the battle of “deficit spending” and “AI productivity”, the latter will win and win big in coming years.
Warren and Charlie were very successful with their conservative approach. And a conservative approach is likely to continue to have some success.
In recent decades, tech has increasingly grown and now dominates the growth in the global economy. Trillions of dollars of wealth have resulted during that time. Warren isn’t comfortable with tech and chooses not to participate.
One might point to Apple, but Apple’s current success is largely driven by established repeat buying and subscription activities… enabled… by tech. Most economic activity these days is enabled by tech and unavoidable for the most part. So, I contend that Berkshire is just doing business as usual and would rather have a cash pile than participate in the fastest growing part of the economy. That has led to what is arguably sub-par returns, but those returns are also pretty reliable.
Investors can own it or avoid it… but I think it’s unrealistic to expect change while Warren is alive… and a post-Warren BRK is going to be an unknown regarding an change at this point.
Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.
The fixed income pile–combining cash on the short end and bonds on the longer end–is not at all out of the ordinary compared to total assets on a historical basis. No need to get worked up over its size.
He doesn’t look at the macro per se. But he does take into account how policy will affect the value of the companies he may want to buy. For example Japan policy led to him buying into a few large Japanese conglomerates recently (so far a very profitable trade in these early years).
I’m of two minds. Apple can also be looked at as a consumer goods company. Google and Meta are mostly advertising companies. And Amazon is a combination of a retailer with low margins and a cloud services provider with very high margins.
It depends on how you define “an X company”. If you define it as “a company that sells X” then there are fewer tech companies, but if you define it as “a company that uses X” then there are many tech companies. For example, Google is an advertising company that uses and develops a lot of tech. Apple is a consumer goods company that uses and develops a lot of tech. Microsoft is a software company that uses, develops, AND SELLS lots of tech. Amazon is half a retailer that uses and develops lots of tech, and Amazon is also half a tech company that sells tech. AMSL is a tech company that uses, develops, and sells lots of tech. Meta is a social media company that uses and develops lots of tech, and sells advertising.
This is true. What really matters is what you mean when you say “ABC is an X company”.
