Name: Warren Buffett's cash pile reaches record $325 billion
Uploaded: 2025-02-23T00:59:15.000Z
Duration: 6 min 5 s
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The latest Bank of America Fund Manager Survey showing investor cash holdings at a 15-year low.

Compare that to Warren Buffett who's sitting on a record cash pile at over $325 billion.

While he's put some of that dry powder to use in the fourth quarter, he's also trimmed and exited several positions.

Joining us now on this, we've got Lee Munson, President and Chief Investment Officer at Portfolio Wealth Advisors.

Buffett's cash holdings in particular seem to get a lot of attention because folks are concerned that it is a bearish signal for the market if Buffett is not invested in U.S. stocks.

Well, a lot of this stems from a huge sale of Apple that he did last year, and he just has a bunch of cash and he's slow to get it to use.

They have been on a buying spree with Occidental, and I think that that's something that is notable.

They bought a ton in December, they bought a ton this year, and so I think it's about what qualities that Buffett likes, and he's looking for things that have strong cash flow, assets that aren't gonna go anywhere, and I think he's got a real love for Occidental because they have these quality properties, or let's just say these assets in the Permian Basin, and they're paying down debt.

So I think that what it really says is that this is a momentum market, it's hard to find good value right now, and I think that Buffett is waiting his time.

But I don't think we should have this, I don't think we should think just because he has a lot of cash, it means the market is ready to fall per se.

In the past, since I think last April, it's down 30%, and so there are things in the market that are down, beaten up, left for dead, that you can buy here.

Lee, what do you think this tells us about Buffett's, and his team's, just longer-term strategy, just in terms of the opportunity that they have identified within Occidental?

They like buying beaten down stocks, they like seeing some of the companies that could potentially turn around.

So what is the signal, maybe, about that strategy, and what that looks like for what's ahead?

Well, you know, I think there's some sense that there's always gonna be Buffett haters, there's always gonna be people who think that what that team does is too slow-moving, that there's not enough opportunity set.

We're in a market for years now that has been based on big tech companies promising ever-larger growth in revenues.

But I think that when you look at the type of trades that he's doing, and the type of positions that they're putting on, it really goes, I mean, I don't think anything's changed in 10, 15, 20 years, or even beyond that, of what their strategy is.

I think that you can look at what they're buying, and it's just a completely different philosophy of the market than, is Facebook gonna hit their earnings, and are they gonna have an AI agent by the end of the year?

To focus specifically on Occidental, though, it's interesting because, and you mentioned this in your note, it's not a company that is hedged on oil prices, and of course is at risk of the potential depression in oil prices, which is something that we have been seeing.

How risky does that make this name, particularly given both the geopolitical backdrop abroad, and then also here at home?

Risk, you know, I think Buffett said risk is not knowing what you're doing, and I think that Occidental's a good example of this.

I was long this stock several years back when it was in the high 50s, early 60s.

It went sideways for a while, it wasn't making money, and I had to go and get busy.

Now you come back, you look around, you think, hey, this thing's down 30% from where I last traded it.

We're gonna see some earnings today, we're gonna see how bad the cash flow is.

I think that you have to take a longer-term view.

Do you think that assets in the Permian Basin are gonna be more or less valuable three, five years from now?

Do you think that upstream, the exploration, with Trump's America right now, do you think that's gonna be a headwind for Occidental?

In Occidental, the narrative is confusing.

They've got Midstream, they've got the chemical company, they've got the carbon capture, and I think Wall Street doesn't like not having a pure play.

But I think that if you like assets, if you wanna do an asset play, and you believe that Buffett really believes so much in Occidental and their management team, I think it's worth looking at.

But I would rather wait for some bad earnings, I'd rather wait for Wall Street to completely leave this thing for dead.

It could get worse, because their cash flow's going down right at a time that they need to be paying down debt.

So I'd actually like to take a page from Buffett's thing and rejoice when stock prices are down.

I just think Occidental has a lot of risk this year.

We've got a president who's trying to lower energy prices, but on the other side, he's gonna loosen up regulation, and the strategy that Occidental's doing right now, it's great.

Just remember, you're not gonna get a clean narrative, it's never gonna be a hot momentum stock, and if it's gonna work, it's gonna be a sleeper hit.

Lee, what about some of the other moves that we've seen Berkshire make?

Consolation Brands, that's a new holding here, adding to Domino's, adding to Poolcorp, adding to SiriusXM, what does that tell you?

Well, I think he's just knee-deep in the value trade.

He just does not care about some of the broader things that are happening in AI or what have you.

They're looking at staples, they're looking at things that people use every day.

Someday I'm gonna call them and say, stop charging my teenage daughter's car for 10 bucks a month.

And so I think that you can look at that and I think he thinks that the U.S. consumer is just fine.

I just think a lot of what he's doing is unpopular right now.

And until we see some big disappointments in the MAG 7, you're not gonna see a lot of lift on these stocks.

All right, Lee, always great to talk to you.

Thanks so much for taking the time to join us here this morning.