MW Here's the real reason Berkshire Hathaway holds almost $350 billion in cash right now

By Charlie Garcia

If America itself was a stock - ticker symbol 'USA' - Warren Buffett would like the product, but not the management

Maybe it's time we tune out Buffett's reassuring folksiness and closely watch where Berkshire is aiming that cash-loaded bazooka.

When relentless rain turned the Churchill Downs racetrack "sloppy" last Saturday - for only the 10th time in 151 Kentucky Derbys - I approached betting on the horses in the race exactly as Warren Buffett evaluates stocks for Berkshire Hathaway $(BRK.A)$ $(BRK.B)$. I bet conservatively on horses with the strongest fundamentals and a clear margin of safety.

The strategy paid off handsomely, with a 39% return. Once again, Buffett's foundational investing rules proved their worth:

Rule No. 1: Don't lose money.Rule No. 2: Don't forget rule No. 1.

Earlier that day in Omaha, Neb., Buffett addressed 30,000 Berkshire Hathaway shareholders gathered for the company's annual meeting - at which he announced that his designated successor, Greg Abel, would become Berkshire's CEO at the end of this year.

In his remarks, Buffett channeled the same thoughtful, methodical analysis that transformed a young horse-racing handicapper into the world's greatest investor. He calmly explained Berkshire's unprecedented cash reserve - recently close to $350 billion - like a seasoned pilot mentioning a bit of turbulence, even as he fastens on his parachute.

Maybe it's time we tune out Buffett's reassuring folksiness and closely watch where Berkshire is aiming that cash-loaded bazooka. Beneath the Cherry Coke grin lies capitalism's apex predator - and when Buffett finally strikes, stunned investors will be left wondering how they missed him silently circling all along.

Right now, Buffett isn't seeing what he wants in today's market, and he's patiently waiting until he does. Yet behind this dramatic positioning lies a philosophy remarkable for its simplicity and endurance. Invest like a business owner: Buy understandable businesses protected by deep moats, run by managers you'd trust with your wallet and priced with a clear margin of safety so you can sleep at night. Then step back, and let time and compounding do the rest.

Read: Warren Buffett offered this timely investment advice after a tumultuous April for equities

Now let's turn Buffett's analytical lens squarely on America itself - ticker symbol "USA" - as if the country just went public on the New York Stock Exchange.

At first glance, Buffett might feel like he'd spotted a unicorn at a yard sale- excellent condition, minimal wear, priced to move. America's fundamentals are everything an investor dreams about. Buffett himself said as much on Saturday, describing America as "a revenue stream, a capital-producing stream, a brains-producing machine like the world has never seen."

Translation: America is the Apple-Google-Amazon hybrid every hedge-fund manager craves, with a side of fries.

But then Buffett looks toward Washington, D.C., and sees fiscal leaders who make Enron execs look responsible.

Translation: Sooner or later, someone has to pick up the check.

Buffett knows firsthand how ugly political sausage-making can get. His father served four terms in Congress, dragging a teenage Buffett to Washington for a front-row seat to democracy's messy reality.

Printing money to dodge fiscal responsibility is like solving engine trouble with grenades - it silences the noise, but leaves you stranded.

Buffett has described America's finances as "a 7% gap when probably 3% is sustainable" - which is a way of saying that you might want to buckle up. Said Buffett: "It's a job I don't want, but it's a job I think should be done. And Congress does not seem good at doing it."

Interest payments are gobbling up tax revenue faster than Congress can raise it. Debt is ballooning like a college freshman's credit-card balance. Buffett put it bluntly: "We are doing something unsustainable, and it has the aspect that it gets uncontrollable."

Then, borrowing from economist Herbert Stein's timeless wisdom, Buffett offered this cheerful reminder: "If something can't go on forever, it won't."

What keeps Buffett awake at night is the frightening simplicity of the government's go-to financial fix: Just print more dollars. Easy, right?

As Buffett bluntly warned on Saturday, "We've got a lot of problems always as a country, but this is one we bring on ourselves. ... If you picked a way to screw it up, it would involve the currency." Printing money to dodge fiscal responsibility is like solving engine trouble with grenades - it silences the noise, but leaves you stranded.

America's economy is a finely tuned race car built to win championships. The dollar (DX00) is its engine, precision-crafted over generations. Abuse it through fiscal irresponsibility, and like even the finest machine, it will stall before reaching the finish line.

Buffett's philosophy - whether he's sizing up blue-chip stocks, thoroughbred stallions or entire nations - always hinges on disciplined fundamentals, ruthless realism and saintly patience.

Buffett's philosophy - whether he's sizing up blue-chip stocks, thoroughbred stallions or entire nations - always hinges on disciplined fundamentals, ruthless realism and saintly patience. Nowhere is this clearer than in his lifelong passion for Geico - a love story doubling as a vivid roadmap for America's economic future.

Geico isn't just another line item in Buffett's portfolio. It's the girl who got away, except she didn't - he married her.

It began in 1951 when Buffett, age 21 and studying at Columbia University's business school under legendary investor Benjamin Graham, found out that Graham chaired Geico's board. Buffett hopped a train to Washington, D.C., to see what made the insurance company tick. It was a Saturday and the office was closed, but Buffett, displaying the persistence that later made him billions, sweet-talked his way past a janitor and cornered a senior Geico executive who explained the company's magic.

Buffett was sold. He liquidated nearly all his investments - a decision professors probably called "nuts" or something less printable - and put 75% of his net worth into Geico. He then published an analysis confidently titled "The Security I Like Best," laying out principles that have guided him ever since.

Decades later, after rescuing Geico from near-collapse in the 1970s, Buffett gradually acquired shares until, by 1996, Berkshire Hathaway fully owned the company. Geico became the ultimate symbol of Buffett's faith in America's economic promise - so long as it's managed responsibly.

Geico is a blueprint, a clear example of what America itself urgently needs to do: modernize technology, tame bureaucracies, rationalize the workforce and, finally, show some fiscal discipline.

Geico's disciplined turnaround, detailed at the shareholder meeting Saturday by Ajit Jain, Berkshire's vice chair of insurance operations, is precisely what America itself desperately needs: rationalized bureaucracy, technological modernization, a leaner workforce - and real fiscal discipline.

Five years ago, Jain explained, Geico was stuck at "the bottom of the list in telematics" - the fancy technology that insurers use to spy on how carefully (or recklessly) you drive. Progressive and other rivals were decades ahead, making Geico look like a guy still trying to figure out his VCR.

But the company didn't sulk. It aggressively upgraded technology, rebuilt its systems and slimmed its workforce to 30,000 from 50,000, trimming about $2 billion annually in costs. Today, Jain proudly declared, "Our telematics at Geico are about as good as anyone's."

Geico is now carefully positioned for the next tech revolution - artificial intelligence. Competitors are racing into AI at warp speed, but Geico, wisely skeptical, has adopted what Jain calls a "state of readiness," poised to capitalize on AI's potential without expensive blunders.

This disciplined transformation has paid off spectacularly. Geico is now consistently earning record profits - results so strong that Jain admitted he "never thought [he'd] live to see" them.

Buffett shorting Uncle Sam is as likely as Santa shorting Christmas. But his cash pile says he's not exactly stocking up on 'Morning in America' bumper stickers.

Buffett recognizes Geico's story as a blueprint, a clear example of what America itself urgently needs to do: modernize technology, tame bureaucracies, rationalize the workforce and, finally, show some fiscal discipline. Of course, Buffett shorting Uncle Sam is as likely as Santa shorting Christmas. But his cash pile says he's not exactly stocking up on "Morning in America" bumper stickers.

Instead, Buffett sits atop the economic food chain, like a crocodile at the watering hole, content to wait patiently - years, if necessary - until the fiscal buffalo stumble close enough. As Buffett plainly said, "Very occasionally - but it'll happen again ... it could be next week, it could be five years off - we'll be bombarded with offerings we'll be glad we have the cash for."

Buffett might not openly bet against America, but he's definitely betting on American politicians continuing to do stupid things - a wager safer than Treasury bonds. Keep debasing the dollar, and soon enough we'll hand China a neatly printed manual: "How to Build a Real Currency and Humiliate Uncle Sam."

Geico's moral couldn't be clearer for Americans: Make tough decisions now or brace for the day the shiny economic Corvette coughs, sputters and dies - leaving Americans stranded on the shoulder, waving pathetically as China speeds past, honking in mock sympathy.

Charlie Garcia is founder and a managing partner of R360, a peer-to-peer organization for individuals and families with a net worth of $100 million or more.

Read more about Buffett and Berkshire Hathaway:

-- How Warren Buffett went from picking horses to picking stocks - and what you can learn from it

MW Here's the real reason Berkshire Hathaway holds almost $350 billion in cash right now

By Charlie Garcia

If America itself was a stock - ticker symbol 'USA' - Warren Buffett would like the product, but not the management

Maybe it's time we tune out Buffett's reassuring folksiness and closely watch where Berkshire is aiming that cash-loaded bazooka.

When relentless rain turned the Churchill Downs racetrack "sloppy" last Saturday - for only the 10th time in 151 Kentucky Derbys - I approached betting on the horses in the race exactly as Warren Buffett evaluates stocks for Berkshire Hathaway (BRK.A) (BRK.B). I bet conservatively on horses with the strongest fundamentals and a clear margin of safety.

The strategy paid off handsomely, with a 39% return. Once again, Buffett's foundational investing rules proved their worth:

Rule No. 1: Don't lose money.Rule No. 2: Don't forget rule No. 1.

Earlier that day in Omaha, Neb., Buffett addressed 30,000 Berkshire Hathaway shareholders gathered for the company's annual meeting - at which he announced that his designated successor, Greg Abel, would become Berkshire's CEO at the end of this year.

In his remarks, Buffett channeled the same thoughtful, methodical analysis that transformed a young horse-racing handicapper into the world's greatest investor. He calmly explained Berkshire's unprecedented cash reserve - recently close to $350 billion - like a seasoned pilot mentioning a bit of turbulence, even as he fastens on his parachute.

Maybe it's time we tune out Buffett's reassuring folksiness and closely watch where Berkshire is aiming that cash-loaded bazooka. Beneath the Cherry Coke grin lies capitalism's apex predator - and when Buffett finally strikes, stunned investors will be left wondering how they missed him silently circling all along.

Right now, Buffett isn't seeing what he wants in today's market, and he's patiently waiting until he does. Yet behind this dramatic positioning lies a philosophy remarkable for its simplicity and endurance. Invest like a business owner: Buy understandable businesses protected by deep moats, run by managers you'd trust with your wallet and priced with a clear margin of safety so you can sleep at night. Then step back, and let time and compounding do the rest.

Read: Warren Buffett offered this timely investment advice after a tumultuous April for equities

Now let's turn Buffett's analytical lens squarely on America itself - ticker symbol "USA" - as if the country just went public on the New York Stock Exchange.

At first glance, Buffett might feel like he'd spotted a unicorn at a yard sale- excellent condition, minimal wear, priced to move. America's fundamentals are everything an investor dreams about. Buffett himself said as much on Saturday, describing America as "a revenue stream, a capital-producing stream, a brains-producing machine like the world has never seen."

Translation: America is the Apple-Google-Amazon hybrid every hedge-fund manager craves, with a side of fries.

But then Buffett looks toward Washington, D.C., and sees fiscal leaders who make Enron execs look responsible.

Translation: Sooner or later, someone has to pick up the check.

Buffett knows firsthand how ugly political sausage-making can get. His father served four terms in Congress, dragging a teenage Buffett to Washington for a front-row seat to democracy's messy reality.

Printing money to dodge fiscal responsibility is like solving engine trouble with grenades - it silences the noise, but leaves you stranded.

Buffett has described America's finances as "a 7% gap when probably 3% is sustainable" - which is a way of saying that you might want to buckle up. Said Buffett: "It's a job I don't want, but it's a job I think should be done. And Congress does not seem good at doing it."

Interest payments are gobbling up tax revenue faster than Congress can raise it. Debt is ballooning like a college freshman's credit-card balance. Buffett put it bluntly: "We are doing something unsustainable, and it has the aspect that it gets uncontrollable."

Then, borrowing from economist Herbert Stein's timeless wisdom, Buffett offered this cheerful reminder: "If something can't go on forever, it won't."

What keeps Buffett awake at night is the frightening simplicity of the government's go-to financial fix: Just print more dollars. Easy, right?

As Buffett bluntly warned on Saturday, "We've got a lot of problems always as a country, but this is one we bring on ourselves. ... If you picked a way to screw it up, it would involve the currency." Printing money to dodge fiscal responsibility is like solving engine trouble with grenades - it silences the noise, but leaves you stranded.

America's economy is a finely tuned race car built to win championships. The dollar (DX00) is its engine, precision-crafted over generations. Abuse it through fiscal irresponsibility, and like even the finest machine, it will stall before reaching the finish line.

Buffett's philosophy - whether he's sizing up blue-chip stocks, thoroughbred stallions or entire nations - always hinges on disciplined fundamentals, ruthless realism and saintly patience.

Buffett's philosophy - whether he's sizing up blue-chip stocks, thoroughbred stallions or entire nations - always hinges on disciplined fundamentals, ruthless realism and saintly patience. Nowhere is this clearer than in his lifelong passion for Geico - a love story doubling as a vivid roadmap for America's economic future.

Geico isn't just another line item in Buffett's portfolio. It's the girl who got away, except she didn't - he married her.

It began in 1951 when Buffett, age 21 and studying at Columbia University's business school under legendary investor Benjamin Graham, found out that Graham chaired Geico's board. Buffett hopped a train to Washington, D.C., to see what made the insurance company tick. It was a Saturday and the office was closed, but Buffett, displaying the persistence that later made him billions, sweet-talked his way past a janitor and cornered a senior Geico executive who explained the company's magic.

Buffett was sold. He liquidated nearly all his investments - a decision professors probably called "nuts" or something less printable - and put 75% of his net worth into Geico. He then published an analysis confidently titled "The Security I Like Best," laying out principles that have guided him ever since.

Decades later, after rescuing Geico from near-collapse in the 1970s, Buffett gradually acquired shares until, by 1996, Berkshire Hathaway fully owned the company. Geico became the ultimate symbol of Buffett's faith in America's economic promise - so long as it's managed responsibly.

Geico is a blueprint, a clear example of what America itself urgently needs to do: modernize technology, tame bureaucracies, rationalize the workforce and, finally, show some fiscal discipline.

Geico's disciplined turnaround, detailed at the shareholder meeting Saturday by Ajit Jain, Berkshire's vice chair of insurance operations, is precisely what America itself desperately needs: rationalized bureaucracy, technological modernization, a leaner workforce - and real fiscal discipline.

Five years ago, Jain explained, Geico was stuck at "the bottom of the list in telematics" - the fancy technology that insurers use to spy on how carefully (or recklessly) you drive. Progressive and other rivals were decades ahead, making Geico look like a guy still trying to figure out his VCR.

But the company didn't sulk. It aggressively upgraded technology, rebuilt its systems and slimmed its workforce to 30,000 from 50,000, trimming about $2 billion annually in costs. Today, Jain proudly declared, "Our telematics at Geico are about as good as anyone's."

Geico is now carefully positioned for the next tech revolution - artificial intelligence. Competitors are racing into AI at warp speed, but Geico, wisely skeptical, has adopted what Jain calls a "state of readiness," poised to capitalize on AI's potential without expensive blunders.

This disciplined transformation has paid off spectacularly. Geico is now consistently earning record profits - results so strong that Jain admitted he "never thought [he'd] live to see" them.

Buffett shorting Uncle Sam is as likely as Santa shorting Christmas. But his cash pile says he's not exactly stocking up on 'Morning in America' bumper stickers.

Buffett recognizes Geico's story as a blueprint, a clear example of what America itself urgently needs to do: modernize technology, tame bureaucracies, rationalize the workforce and, finally, show some fiscal discipline. Of course, Buffett shorting Uncle Sam is as likely as Santa shorting Christmas. But his cash pile says he's not exactly stocking up on "Morning in America" bumper stickers.

Instead, Buffett sits atop the economic food chain, like a crocodile at the watering hole, content to wait patiently - years, if necessary - until the fiscal buffalo stumble close enough. As Buffett plainly said, "Very occasionally - but it'll happen again ... it could be next week, it could be five years off - we'll be bombarded with offerings we'll be glad we have the cash for."

Buffett might not openly bet against America, but he's definitely betting on American politicians continuing to do stupid things - a wager safer than Treasury bonds. Keep debasing the dollar, and soon enough we'll hand China a neatly printed manual: "How to Build a Real Currency and Humiliate Uncle Sam."

Geico's moral couldn't be clearer for Americans: Make tough decisions now or brace for the day the shiny economic Corvette coughs, sputters and dies - leaving Americans stranded on the shoulder, waving pathetically as China speeds past, honking in mock sympathy.

Charlie Garcia is founder and a managing partner of R360, a peer-to-peer organization for individuals and families with a net worth of $100 million or more.

Read more about Buffett and Berkshire Hathaway:

-- How Warren Buffett went from picking horses to picking stocks - and what you can learn from it

(MORE TO FOLLOW) Dow Jones Newswires

May 08, 2025 07:35 ET (11:35 GMT)

MW Here's the real reason Berkshire Hathaway -2-

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-Charlie Garcia

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