Warren Buffett’s Berkshire Hathaway now owns about 5% of the entire Treasury bill market, according to an estimate from JPMorgan. Berkshire’s T-bill position has more than doubled over the past year.
As of the end of March, the stake was $314 billion. This accounts for 5% of all outstanding short-term government bills. Berkshire’s holdings now surpass foreign banks, the Federal Reserve, and other major investors.
Buffett is known to purchase Treasury bills at weekly Treasury auctions, sometimes in increments of $10 billion. While interest rates have dipped from multi-year highs reached last year, they are still substantial. Berkshire can earn billions of dollars in interest income on its massive pool of bonds every year.
Treasury bills with maturities between one month and one year today all pay yields above 4%.
Berkshire’s T-bill investment grows
Buffett reiterated his confidence at Berkshire’s annual meeting last weekend.
He believes the mountain of cash equivalents will eventually be deployed. He stressed that it’s crucial to stay patient for good opportunities. Now and then, you find something occasionally, but it’ll happen again,” Buffett told shareholders on May 2.
“I don’t know when. It could be next week, it could be five years off, but it won’t be 50 years off. We will be bombarded with offerings for which we’ll be glad we have the cash.”
Buffett revealed that Berkshire had almost put $10 billion into work recently but ultimately didn’t finalize the investment.
He noted that one problem in the investment business is that well-priced assets don’t come along orderly. “We came pretty close to spending $10 billion, not that long ago, for example, but we’d spend $100 billion if the right opportunity came along,” he said. “Those decisions are not tough to make when something is offered that makes sense to us, that we understand, and offers good value.”
This strategic patience aligns with Buffett’s well-known investment philosophy.
It ensures Berkshire is prepared to act decisively when the right opportunity arises.
