Warren Buffett’s decision to sit on a $300 billion cash pile last year has proven wise, as he is the only mogul among the world’s 10 richest whose net worth has risen this year. While the markets have been rocked by recent turmoil following President Trump’s surprise tariff announcements, Buffett has managed to weather the storm. In a historic two-day rout last week, the world’s ultrarich collectively lost more than half a trillion dollars, marking the steepest loss since the height of the COVID-19 market crash in 2020.
Among the top 10 richest people in the world, Buffett is the only one who has seen his net worth rise since January 1, with an increase of $12.7 billion. Buffett’s strategy of selling stocks and hoarding cash has insulated him and other Berkshire Hathaway shareholders from the market chaos. From the opening bell on Thursday to Monday’s close, the S&P 500 sank 10.7%, while the tech-heavy Nasdaq Composite plummeted 11.3%.
This resulted in significant financial losses among the ultra-wealthy. Nearly 90% of the billionaires tracked by the index saw their fortunes shrink on Friday, with an average decline of 3.5%. Tesla CEO Elon Musk’s net worth plunged $31 billion as Tesla shares fell more than 10% on Friday.
Musk lost an additional $4.4 billion on Monday, bringing his total losses over the last three trading days to $135 billion. Meta Platforms CEO Mark Zuckerberg also saw significant losses, with $27 billion evaporating from his fortune as Meta stock slumped nearly 14% over Thursday and Friday.
Buffett’s prudent cash strategy
However, Meta stock rebounded by more than 2.28% on Monday, increasing Zuckerberg’s net worth by an additional $3 billion. Buffett’s move last year to sell stocks and accumulate a massive cash reserve has largely insulated his company from the tariff turmoil gripping the markets. In a year marked by soaring valuations and a frenzied stock market, Buffett opted for caution.
He pared down Berkshire Hathaway’s portfolio and accumulated an unprecedented amount of cash, signaling his skepticism about the high prices of both public companies and private businesses. Berkshire Hathaway ended the year with cash and cash-equivalent assets totaling $334 billion before liabilities. After subtracting $12.8 billion in payables for Treasury bill purchases, the figure still stood at $321 billion.
This cash pile represents roughly one-third of Berkshire’s $1 trillion market value, highlighting Buffett’s reluctance to invest in an overheated market. As a result of this cautious approach, Berkshire Hathaway’s stock has risen nearly 8% since January 1, while the S&P 500 is down 14% over the same period. Instead of aggressively investing, Buffett and his team quietly offloaded stocks, resulting in net stock sales of $134 billion for the year.
Even longstanding holdings like Apple and Bank of America were trimmed. This strategic repositioning came with a substantial tax bill. Berkshire paid $26.8 billion in corporate income tax to the IRS in 2024, which Buffett noted was “the largest amount ever paid by any US company.”
As the markets continue to experience volatility, Buffett’s cautious strategy appears to be paying off, contrasting sharply with the fortunes of his fellow billionaires.
Image Credits: Photo by Sasun Bughdaryan on Unsplash
