Not even the U.S. Federal Reserve holds more Treasury Bills than Warren Buffett and Berkshire Hathaway do, now that the Oracle of Omaha has increased his holdings to more than 4% of all publicly issued T-Bills.
As of the end of June, Berkshire held $237.6 billion in T-Bills, nearly double its holding from the previous quarter.
Why? T-Bills represent a cash equivalent that can provide some safety in the face of a volatile market. The fact that the U.S. Stock Market Capitalization versus U.S. GDP, often referred to as the “Buffett Indicator,” is currently elevated could be the motivating factor behind Buffett’s decision to run to cash so quickly. Whatever the case, the move represents a response to recent market volatility and what could be ahead that’s worth watching.
#EyeOnVolatility
