Stock god transforms into bond king! Buffett becomes the fourth largest short-term debt holder in the United States, even more than the Federal Reserve.

Currently, Warren Buffett's Berkshire Hathaway company holds a huge amount of cash and cash equivalents, but they have not been properly allocated. Buffett openly stated that stock investment still requires waiting for good opportunities. According to estimates by JPMorgan Chase, Berkshire Hathaway holds $314 billion in US short-term Treasury bonds, making it the fourth largest holder of US Treasury securities globally and further solidifying its position as the largest non-government holder in the US short-term Treasury market. US Treasury bills refer to short-term Treasury bonds of less than 1 year. According to data from the US Department of the Treasury, as of the end of March, the total size of the US short-term Treasury market was $6.155 trillion, meaning Berkshire currently controls 5.1% of this total, up from 4.89% in the previous quarter when its total holdings were $300.87 billion. Based on an average yield of 4.36% on US Treasury bonds, this means that Buffett can earn about $13.7 billion in risk-free income per year just by being the fourth largest holder of US Treasury securities. Objectively speaking, Berkshire currently holds more short-term Treasury bonds than the Federal Reserve, which reportedly only has $195 billion in short-term Treasury bonds on its balance sheet. This is a shocking fact that highlights how important Buffett's financial position has become to the US. Waiting for a good opportunity Berkshire increasing its holdings of US Treasury bonds is not accidental. The company has reduced its stock exposure for 10 consecutive quarters, even though during this time, the US stock market continued to rise. But Buffett did not bet on the upward trend and instead filled Berkshire's coffers with US Treasury bonds and cash products to create a "dry powder" (investment resources) for when stock prices eventually collapse. He has experienced this situation before, when the market was overheated, valuations were too high, and risks were mispriced. Currently, Berkshire Hathaway's cash reserves exceed $347 billion, most of which are highly liquid government bonds. In today's interest rate environment, this preference is paying off on a large scale. Buffett's substantial holding of US bonds also signals that he doesn't see any cheap assets in today's environment and believes the best strategy is to maintain liquidity. At a previous Berkshire Hathaway annual meeting, Buffett said, "From time to time, you will find suitable investment opportunities. Occasionally, very occasionally, but this situation will happen again. I don't know when it will happen, it may be next week, or it may be five years from now, but it definitely won't be fifty years later. There will be plenty of investment opportunities by then, and with our cash reserves, we will be able to seize these opportunities." Buffett also revealed that Berkshire nearly invested $100 billion recently but ultimately did not go through with it. Buffett is set to step down as CEO at the end of this year, and he also said at the meeting, "When there are investment opportunities that make sense to us, that we understand and have good value, making investment decisions is not difficult. At that time, it won't be investing $100 billion, but $1 trillion." This article is reproduced from "Cai Lianshe", GMTEight editor: Liu Jiayin.