Warren Buffett is once again perched atop a mountain of cash like Smaug on his gold.
At the end of Q3 2025, Berkshire Hathaway’s cash pile stood at a record $325 billion – 28.3 % of the entire conglomerate’s assets. That is the highest cash-to-total-assets ratio since the peak of the dot-com bubble in early 2000 and the eve of the 2008 financial crisis.
Coincidence?
Of course it is… if you believe in very, very large coincidences.
While the rest of Wall Street is throwing money at anything that whispers “LLM,” “agentic AI,” or “AGI by Christmas,” the 95-year-old Oracle of Omaha is quietly pouring himself a Cherry Coke, leaning back, and saying exactly nothing. Silence, in Buffett’s language, speaks louder than any CNBC interview.
And yes, Berkshire still hasn’t touched its Bitcoin. Not a single satoshi bought or sold since it first dipped a toe in 2021–2022. They just sit on it like a dusty suitcase in the attic – the kind you don’t open unless the house is already on fire.
So what is he waiting for?
1. A violent tech correction
The “Magnificent Seven” now trade at an average forward P/E above 42× – higher than the dot-com peak for the equivalent cohort. Nvidia alone is valued at more than the entire energy sector. Earnings are growing fast, but valuations are growing faster. At some point physics wins.
2. The AI capital-expenditure arms race running into a wall
Hyperscalers and chip companies have announced $300+ billion in AI-related capex for 2025 alone. Return on that invested capital is still a PowerPoint slide, not a cash-flow statement. When the first big guidance miss hits, the dominoes will be spectacular.
3. A perfect geopolitical-debt-election storm
U.S. federal debt is now $36.2 trillion and rising $1 trillion every 100 days. The 2024 election aftermath is still producing court cases, the 2026 mid-terms are already in full swing, and the Fed’s balance-sheet runoff continues. One wrong move and Treasury yields spike, liquidity evaporates, and risk assets reprice in a hurry.
4. Liquidity drying up faster than anyone expects
The Fed has shrunk its balance sheet by $2.1 trillion since 2022 and is still draining $60 billion a month. Reverse-repo facilities are down to $280 billion – the lowest since 2021. When the final buffers are gone, markets discover that not every bid has a bid underneath it.
Buffett has followed the same playbook for seven decades:
- Be fearful when others are greedy;
- Be greedy only when others are fearful.
Right now the greed meter is pegged. Robinhood traders are 7× leveraged on micro-strategy calls, Cathie Wood is starting ARK Quantum Computing ETF #3, and every Series B deck has the same hockey-stick labeled “post-AGI revenue.”
What should the rest of us do?
- Don’t drink the AI Kool-Aid just because the headlines are delicious. Revolutionary technology and investment bubbles are not mutually exclusive – in fact, they usually travel together;
- Keep a meaningful cash buffer, short-duration Treasuries, or gold. Boring assets become beautiful when volatility spikes;
- Do NOT panic-sell quality compounders just because “Buffett is in cash.” He is managing $900+ billion with permanent capital and a 60-year horizon. Your constraints are different;
- Watch the Fed’s balance-sheet runoff and the reverse-repo drain like a hawk. The moment QT pauses or pivots to QE, that will be Buffett’s starting gun – and probably yours too.
Until then, the dragon is not sleeping.
He’s wide awake, counting his gold, and waiting for the knights to get tired.
History rhymes.
When Buffett last held this much cash relative to assets, the Nasdaq fell 78 % and the best buying opportunities of a generation appeared.
The discounts are coming.
The only question is whether you’ll have dry powder when the sale begins.
Also read:
- Chinese EVs Electrify South America: A Boom Without Tesla in Sight
- The Crumbling Social Contract: Why 40% of Young American Women Dream of Leaving for Good
- The 64-Square Blueprint That Created Shohei Ohtani
Thank you!
