MW Berkshire Hathaway is now sitting on a record $397 billion in cash. And it's not the only firm reluctant to invest in the stock market.

By Barbara Kollmeyer

Paul Tudor Jones recently warned on valuations as hedge funds back away

Greg Abel, CEO of Berkshire Hathaway Energy, pictured walking with wife Andrea Abel on July 10, 2024. Abel explained over the weekend why Berkshire is holding so much cash.

Berkshire Hathaway may have been waving a big yellow caution flag in front of investors this weekend, after the giant conglomerate revealed it's sitting on its biggest-ever cash pile of $397 billion.

At his first annual meeting as CEO of Berkshire $(BRK.B)$ $(BRK.A)$ on Saturday, Greg Abel justified that holding - largely U.S. Treasury bills: "It's not that we don't see exceptional companies out there today that we'd love to own... but the price relative to the opportunity, the economic prospects of that company and the related risks - we're not interested in acquiring those companies at that price," Abel said.

Abel said the firm was waiting for dislocations in the market before acting.

Chiming in during an interview with CNBC, Chairman Warren Buffett told CNBC said the stock market has become more of a "casino."

"If you're buying one-day options, or selling them, I mean that's not investing, that's not speculating, it's gambling," he said. "So we've never had people in a more gambling mood than now, but that doesn't mean investing is terrible. That does mean that prices for an awful lot of things will look very silly."

Observers agreed that Berkshire Hathaway was scared away by current prices in the stock market.

"This is not about fundamentals, it is about price. When capital is not deployed at this scale, it usually means one thing: opportunities are not attractive enough. The cash is not idle, it is optionality. Waiting is part of the strategy," commented Leon Kirch, chief investment officer and managing partner at Luxembourg-based wealth-management firm European Capital Partners, in a LinkedIn post.

Nicholas Mugalli, a Substack newsletter author, wrote on X that there were two big noteworthy moments from Berkshire. The first was Abel's comment in an interview ahead of the weekend about how if inflation got to 8% or 9% as it did during COVID-19, "and continues to compound, it could get very scary."

That cash pile is the other. "The company has been a net seller of equities for 14 consecutive quarters. They are not finding things worth buying. They are not deploying. They are holding T-bills at a scale that has no historical precedent for this firm," he wrote.

Connecting the two, Mugalli said the current Berkshire strategy makes sense in an inflationary environment. That is, "liquidate equities priced on disinflationary assumptions, hold short-duration instruments that reprice with rates, and wait. Cash earning 5% while inflation is 3.5% is not a great real return."

Stock markets have shaken off war, inflation and AI worries to resume scaling heights in recent weeks, with the S&P 500 SPX adding its 12th record close on Friday, after April proved the best month since 2020. Some continue to fret about valuations, given the index is trading at around 22 times earnings currently.

Berkshire isn't alone in apparent reluctance to stick money into stocks. In an interview a couple of weeks before the Iran war outbreak, billionaire hedge-fund manager Paul Tudor Jones warned that current markets have lots of similarities to 2000 - "the easiest bear market of my life."

Jones, who accurately predicted the 1987 stock-market crash, said the U.S. is far too "dependent on firm equity prices," and sees a possible 35% crash in the next few years, based on mean reversion. "Valuation matters a lot and the stock market's really high and it's going to be really hard to make money from here I think with any kind of long-term view," he said.

Goldman Sachs noted that hedge funds, meanwhile, sold stocks, led by North America and Europe, for the first time in four weeks in the period up to April 30.

Information technology, consumer discretionary and financials were the top sold global sectors, as they bought industrials, materials and healthcare, the firm said, based on observations from its prime brokerage unit.

-Barbara Kollmeyer

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May 04, 2026 05:16 ET (09:16 GMT)

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