Share prices are falling because the consequences of American tariffs appeared on the stock exchange. This makes Warren Buffett’s decision about gathering cash recently looks very shrewd.

At the end of 2024, his investment vehicle Berkshire Hathaway (Nyse: brk.b) had USD 325 billion in cash and USD 267 billion in shares (USA). So with a lot of ammunition on the falling stock exchange, did Buffett do it?

Cash reserves

Buffett routinely noticed that the biggest risk for Berkshire is a catastrophic event causing huge insurance losses. And keeping cash in the reserve is the best way to defend against this.

Despite this, the sale of inventory such as Apple Last year, it seems to go beyond what is necessary to cover the losses. And from the perspective of share prices, this movement has not succeeded (yet).

While the price of Apple has dropped, it is still much above the place where it was in the first quarter of 2023 – when Berkshire began to sell. However, it is not about how buffett generally thinks about wrestling.

Sale of shares

Buffett often said that his approach to investing in shares is based on activities. In particular, it is about cash that the company can generate. At the beginning of the year, Apple shares in price for profit (p/e) of 37., and when selling largely in the last few years there are reasons to believe that it looks exorbitant.

More precisely, it is complex to see how Apple can return to investors enough cash to justify its price. So it makes sense that Buffett can look for sales. In other words, it will not be proven whether evil according to what the price of Apple does. This will be reduced to the company’s growth and cash flow.

My strategy

Unlike Buffetta, I don’t have an insurance surgery. This means that I do not have to think about cash reserves on the same scale (although I have my own emergency fund). Nevertheless, I try to focus on the same basic principles that, according to him, investors should stick to stocks. And this means focusing on basic companies.

Although there are worse problems than USD 325 billion, smaller operation has some advantages. The lack of a refund from such a huge amount of cash opens some possibilities.

Most of the stocks outside FTSE 100 They are simply too diminutive for someone with Buffetta’s cash to pay attention. But I look carefully at some of the smaller actions in Great Britain at the possibilities.

Market time

Whether Buffett managed to sell at the right time from a stock market perspective. But if so, I don’t think it was deliberate.

The General Director of Berkshire Hathaway was a great success, focusing on companies, not on the prices of shares. Sometimes, however, things are quite nice.

In such times I am glad that I am a shareholder of Berkshire. While I am now focusing on Great Britain, Buffett is a indefinite element on my list of shares that should be considered.