The cash is real. But it doesn’t mean you should be in cash too.
You may have seen a claim doing the rounds again.
Berkshire Hathaway is sitting on a record US$397.4 billion in cash, equal to roughly 60% of its cash and shares put together, the highest share it has ever held. Online, that’s turned into an argument: “Buffett is heavily in cash. The smart money is scared, and you should be too.”
It’s a seductive argument. It plays into a natural fear that something bad is coming, and the pull to hoard cash and wait for the right moment.
But it falls apart once you look at where that cash actually comes from, who’s holding it, and why.
Firstly, Berkshire’s cash isn’t primarily a bet on where the market is headed.
It’s simply what happens when a company with strict buying rules can’t find enough deals that meet them.
For fourteen straight quarters now, Berkshire has sold more stock than it has bought, including in the first quarter of 2026. That doesn’t mean it has stopped buying altogether. It just means it is selling faster than it is buying.
This isn’t one big, dramatic call made in a single month. It’s a long string of ordinary refusals, deal after deal that didn’t clear the bar, and the cash has simply piled up with nowhere else to go.
This year gave the popular story extra fuel. At Berkshire’s annual meeting in May, Warren Buffett said he’d never seen people in a more gambling mood. Put that next to a record cash pile, and the crash story writes itself.
But thinking prices look expensive isn’t the same as calling a crash. Buffett has drawn that line for decades. What he’s actually done, consistently, for sixty years, is refuse to overpay. That’s a different discipline from predicting when the market will fall, and it’s the only one Berkshire has ever practised.
Secondly, a large part of the pile was never his to begin with.
Of the US$397 billion, a large chunk of Berkshire’s balance sheet is insurance float: premiums collected today against claims that might not be paid out for years. Berkshire’s float stood at US$176.9 billion at the end of the first quarter of 2026.
This runs counter to the common assumption that Berkshire is choosing to sit on its own money. That isn’t the case for this part of the pile. The float exists because Berkshire’s insurance business already turns a profit on its own, and it would exist whether or not a single dollar of it ever touched a stock.
The rest of the pile, roughly US$220 billion, is genuinely Berkshire’s own money that is idle cash by choice, but here’s why it still isn’t like your own savings, in three ways.
1. Scale changes what counts as “nothing worth buying.” Berkshire is now worth about US$1.1 trillion. A deal needs to be big, realistically in the billions, before it makes any real difference to a company that size. In their first months under their new CEO Greg Abel, Berkshire did find a few things worth doing, including a US$6.8 billion purchase of homebuilder Taylor Morrison. But even that barely moves the needle against a US$397 billion cash pile.
This is also part of why it isn’t market timing. Market timing means making one big in-or-out call. Berkshire’s buying is nothing like that. It means agreeing to deals for specific businesses or blocks of shares that come along in their own time. An individual saver doesn’t have the same problem. There’s no size at which “buy a globally diversified portfolio” stops being available to you. Buffett can’t take his own advice to buy a low-cost index fund at Berkshire’s scale, because Berkshire can’t simply own “the market” the way a person can.
2. Berkshire isn’t working against a deadline. They have no retirement date and no specific living expenses to cover. That doesn’t mean they can’t fail. Big companies do, and Berkshire is not immune to bad luck or disruption over a long enough stretch. But nothing forces a decision by a fixed date the way retirement, a health scare, or a spending need does for a person. That US$220 billion of Berkshire’s own money can sit there without a deadline attached. Cash in your own bank account isn’t the same.
3. Berkshire gets way more out of supposed optionality than we do. Idle cash gives them the ability to move fast if the market falls far enough to hand them a bargain big enough to matter at their size. An individual’s cash gives you the same kind of choice. An emergency fund, or money set aside for a real opportunity, is genuinely useful for anyone. It’s just far more expensive to hold and much harder to use well. Every dollar kept this way is sitting out of the market while your own clock keeps ticking and your investment time horizon erodes.
And even setting the cost aside, the timing is hard to get right. A JPMorgan analysis of the S&P 500 between 2003 and 2022 found that US$10,000 left fully invested would have grown to about US$65,000. Miss just the ten best trading days across those twenty years, and the return is cut by about half. Many of the best days land within days of the worst ones, right in the middle of the downturns that scare people out of acting at all.
The choice is real. It’s just costly to hold onto and easy to get wrong.
Add it up, and here’s the actual comparison. The popular narrative treats Berkshire’s pile of capital as the same kind of signal as your own after-tax cash in the bank. The bad move is copying the position without assessing the reasons behind it, and, importantly, without checking whether yours are the same.
This is an original article written by Bryan Chan, Lead of Solutions at Providend, the first fee-only wealth advisory firm in Southeast Asia and a leading wealth advisory firm in Asia.
For more related resources, check out:
1. Should You Still Diversify Globally When Singapore Stocks Are Winning?
2. Holding Cash Might Not Be as Safe as You Think
3. Financial Yutori: Why the Best Time to Build Buffers Is When Everyone Feels Confident
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