Buffett continues to bet on a stock market crash
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At least, that's how I see it. He refuses to use his enormous cash reserves to buy any of his own stock, nor anybody else's stock. His own stock has significantly underperformed compared to the market after the tariff crash. He's left billions on the table with his early exit from AAPL. He still does own some, but only 20% of what he had at his peak.
Berkshire Hathaway (BRK.A) (BRK.B) +2% - Shares rose after the company reported a 34% Y/Y jump in operating profit, driven largely by strong insurance underwriting results. The conglomerate’s cash holdings climbed to a record ~$382B as of September 30, 2025, up from ~$344B in Q2, with no share buybacks during the quarter. This marks the final quarterly report with Warren Buffett as CEO, as he prepares to step down at the end of the year, with Greg Abel set to assume the role and begin writing annual shareholder letters starting in 2026. Q3 operating earnings totaled $13.49B, rebounding after two quarters of declines, while net earnings attributable to shareholders rose 17% Y/Y to $30.8B.
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The adage that the stock market can remain irrational longer than you can remain solvent springs to mind. He's in no danger of insolvency, but the opportunity cost of that cash pile, as compared to having invested it in the S&P, can be measured in the 10s of billions. He'll need an extraordinary crash to make any sense of that choice.
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Maybe he just doesn't want to do too much now as he nears retirement, leaving more big decisions to his successor.
@Axtremus said in Buffett continues to bet on a stock market crash:
Maybe he just doesn't want to do too much now as he nears retirement, leaving more big decisions to his successor.
Keeping cash is as big a decision as investing it is.
Education is extremely important.
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I won't be at all surprised if real valuations grow into these bubbly prices, due to AI. If that happens, BRK is screwed. The problem with keeping cash is that you either capitulate eventually, thereby eating the opportunity costs, or permanently accept the objectively bad outcome of 0% returns indefinitely.
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@Axtremus said in Buffett continues to bet on a stock market crash:
Maybe he just doesn't want to do too much now as he nears retirement, leaving more big decisions to his successor.
Keeping cash is as big a decision as investing it is.
@Horace said in Buffett continues to bet on a stock market crash:
@Axtremus said in Buffett continues to bet on a stock market crash:
Maybe he just doesn't want to do too much now as he nears retirement, leaving more big decisions to his successor.
Keeping cash is as big a decision as investing it is.
Yet one that can be easily changed.
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@Horace said in Buffett continues to bet on a stock market crash:
@Axtremus said in Buffett continues to bet on a stock market crash:
Maybe he just doesn't want to do too much now as he nears retirement, leaving more big decisions to his successor.
Keeping cash is as big a decision as investing it is.
Yet one that can be easily changed.
@Axtremus said in Buffett continues to bet on a stock market crash:
@Horace said in Buffett continues to bet on a stock market crash:
@Axtremus said in Buffett continues to bet on a stock market crash:
Maybe he just doesn't want to do too much now as he nears retirement, leaving more big decisions to his successor.
Keeping cash is as big a decision as investing it is.
Yet one that can be easily changed.
Open market stock investments are easily changed.
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@kluurs said in Buffett continues to bet on a stock market crash:
So, what do we recommend for Buffet to ensure he'll not outlive his investments?
Give it all to me and I will support him and his wife until they die.
That’s the kind of guy I am, I don’t even know them yet I’m willing to assume their longevity risk.
