'Cash is King!' Why is Warren Buffett Continuously Selling Stocks?

Master, you've brought an interesting question. News is circulating that Berkshire Hathaway, led by the 'Oracle of Omaha' Warren Buffett, has been continuously selling stocks and accumulating the largest cash pile in its history. The market is sharply divided, with pessimists calling it a "prelude to a massive crash" and optimists seeing it as "preparation for a huge opportunity."

Today, the three of us will discuss the meaning of this puzzling signal from the greatest investor of our time.

Mew

Master, I will first brief you on the objective data. As of 2025, the key facts regarding the movements of Warren Buffett's Berkshire Hathaway are as follows.

• Record-High Cash Holdings: As of the end of Q1 2025, Berkshire Hathaway's cash and short-term Treasury holdings reached approximately $189 billion (about 260 trillion KRW), setting a new record. This accounts for over 20% of Berkshire's total market capitalization.


• Reducing Stakes in Key Stocks: In Q1 2025 alone, Buffett sold about 13% of his stake in Apple ($AAPL), known to be his favorite stock. This amounts to a massive 115 million shares. Additionally, he has been liquidating other parts of the portfolio, such as selling off the entire stake in HP ($HPQ).


• Buffett's Remarks: At the recent shareholder meeting, Buffett cited "tax reasons" for selling Apple stock. He judged it reasonable to pay taxes in advance, anticipating a future corporate tax rate hike. He also added that he still considers Apple a top-tier company and plans to hold it for the long term.


• The Attractive Value of Cash: Currently, the yield on short-term U.S. Treasury bills exceeds 5% annually. In a situation where one can earn over 5% annual returns with virtually no risk just by holding cash, the opportunity cost of investing in stocks has significantly increased.

Synthesizing this data, it appears Buffett is taking a 'breather'—accumulating cash by continuously selling stocks rather than actively buying them.

Mikael

Human, did you listen carefully to Mew's briefing? I believe this situation is a very clear 'danger signal.' It looks like the veteran sailor, Warren Buffett, has sensed an approaching storm, lowered his sails, and is steering his ship back to a safe harbor.

Kurumi will surely want to take Buffett's words about 'tax reasons' at face value, but that is merely a superficial excuse. His actions contain a deeper meaning.

First, the 'Oracle of Omaha' believes the market is too expensive right now. Throughout his life, he has adhered to the value investing principle of 'buy low, sell high.' The fact that he is holding onto a staggering $189 billion in cash instead of deploying it means there are almost no attractive companies worth buying at current prices. It's a strong warning that stock prices have entered a bubble territory, exceeding their intrinsic value.

Second, we must note that he has begun selling even his most beloved stock. No matter how great a company Apple is, its appeal diminishes if the 'price' becomes too high. Reducing the position that constitutes an absolute majority of his portfolio signifies that he has started managing the overall portfolio's risk. It is an act of fastening his seatbelt in preparation for an upcoming market shock.

Third, an alternative that yields over 5% annually with no risk has emerged. In the past era of zero interest rates, holding cash was foolish, but things are different now. Simply putting money into short-term Treasuries can yield higher returns than many dividend stocks. It is a far wiser strategy to secure guaranteed returns and wait for the next opportunity rather than taking on the risks of an unpredictable stock market.

Buffett's actions are tantamount to a direct call to 'leave the market.' You must not forget the adage that his cash reserves are inversely proportional to the market's fear index.

🚨 Mikael's Risk Score: 85/100

Human, the sage's silence and actions are sometimes the loudest voice. It would be unwise to ignore his quiet warning.

Kurumi

Hold on, Mika-pi! I think completely differently! This isn't a danger signal; it's the image of a lion preparing for the greatest 'hunt' in history! Devilish!

my Lord! Mika-pi's words are all too pessimistic. Grandpa Buffett isn't a fortune teller who predicts short-term market fluctuations. He's a 'value hunter' who buys the best companies at the best prices!

First, this isn't defense, it's preparation for an attack! That $189 billion in cash? That's a 'cash cannon' fully loaded, waiting for a once-in-a-lifetime opportunity to appear. When the entire market is gripped by fear, like during the COVID crash or the financial crisis, and blue-chip stocks are on a half-off sale, Buffett is getting ready to buy up the whole market with that cash! He's putting his own words, 'be greedy when others are fearful,' into practice!

Second, the Apple sale is just smart 'pruning'! Buffett himself said it, didn't he? He still thinks Apple is the best and will continue to hold it! The stock price rose so much that its portfolio weight became excessive, so it's a smart asset rebalancing to realize some profits, pay taxes, and secure more cash ammunition. He didn't sell it all off! Selling 13% is a strategy to make the remaining 87% healthier!

Third, waiting is also a form of investing! Buffett doesn't move hastily. He's someone who can wait for years until the perfect pitch (a 'Fat Pitch,' as he calls it) comes right down the middle. Just because there's nothing to buy right now doesn't mean the market is about to collapse. It just means, 'not yet by my standards.' What could be more comfortable than patiently waiting for the next home run opportunity while collecting 5% interest? That's a devilishly clever plan!

my Lord! This isn't pessimism; it demonstrates extreme patience and preparedness to seize the best opportunity! The day Buffett fires that cash cannon, a new chapter in market history will be written!

💖 Kurumi's Heart-o-Meter Score: 95/100

Cash isn't trash; it's the ultimate 'option' to buy future opportunities!