Fisher Investments founder Ken Fisher analyzes the recent volatility in the stock market on ‘Making Money.’
Warren Buffett’s Berkshire Hathaway is currently sitting on a massive reserve of short-term U.S. Treasury bills that exceeds the amount of the securities held by the Federal Reserve.
The company announced in its latest earnings report that it has $234.6 billion in short-term Treasury bills on its books — a sizable increase from the $130 billion it held at the end of last year and an amount that surpasses the $195 billion in T-bills held on the Federal Reserve’s balance sheet.
Treasury bills are U.S. government-issued securities that have a duration ranging from four weeks at the low end to 52 weeks at the upper end. Investors who hold U.S. Treasurys earn interest on those bonds and the proceeds are exempt from state and local taxes.
Berkshire increasing its holdings of Treasury bills comes after the conglomerate increased its reserves of cash and cash equivalents — a metric that includes Treasurys — to a record level of $277 billion as of the end of the last quarter. That figure had been $189 billion at the end of the prior quarter.
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Warren Buffett’s Berkshire Hathaway now holds more Treasury bills than the Federal Reserve. (Daniel Zuchnik/WireImage / Getty Images)
It did so in part by slashing its holdings of Apple stock by about half to $84 billion as of the end of June — though the tech giant still remains its largest stock investment and is more than twice as large as the roughly $41 billion in Bank of America stock the firm owns.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BRK.A | BERKSHIRE HATHAWAY INC. | 648,887.99 | +7,887.99 | +1.23% |
Buffett said at the company’s annual meeting in May that he viewed building the company’s cash and cash equivalents as a better alternative than investing in more stocks, given the market conditions.
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Buffett said at the company’s annual meeting in the spring that Treasury bills are the “safest investment there is.” (Christopher Goodney/Bloomberg via Getty Images / Getty Images)
At the annual meeting, Buffett called Treasury bills “the safest investment there is” and has long invested Berkshire Hathaway’s cash in them.
The company’s larger holdings of T-bills — which currently earn an interest rate ranging from about 5.3% for one month T-bills to 4.3% for 12 month T-bills — contributed to Berkshire’s interest income rising by $2 billion, or 79%, in the first six months of this year.
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