Buffett’s $382 Billion War Chest: Berkshire’s Record Cash Pile Signals He’s Waiting for the Next Big Crash

Berkshire Hathaway opened November with another milestone quarter —one that showcased its financial resilience, expanding profits, and the immense caution Warren Buffett is bringing to a market he clearly believes is overheated. The conglomerate reported third-quarter operating earnings of $13.5 billion, up 34% year over year, surprising analysts who had turned bearish on the company’s near-term growth. The gains were driven primarily by a 200% surge in insurance underwriting income, a rebound in rail and manufacturing profits, and a steady contribution from its energy and utilities businesses. Net earnings, which include investment and derivative gains, totaled $30.8 billion, up from $26.3 billion a year ago.

Berkshire's results highlight the strength of its diversified operating base. In insurance, the standout performer was GEICO, which generated $1.8 billion in pre-tax underwriting profits despite higher claims and pricing headwinds. The reinsurance division swung from a $300 million loss a year ago to a $900 million gain, benefiting from a benign U.S. hurricane season. Burlington Northern Santa Fe, Berkshire’s rail subsidiary, posted a 5% increase in profit to $1.45 billion, aided by cost discipline and stable freight volumes. Meanwhile, the manufacturing, service, and retailing division earned $3.6 billion, up 8%, reflecting healthy consumer demand and industrial resilience. Taken together, the operating results underscored Berkshire’s ability to generate earnings power even as the broader industrial and consumer landscape shows mixed signals.

But the headline number that captured Wall Street’s attention was Berkshire’s cash position—now a record $381.7 billion. The company continues to build its cash mountain, with cash and equivalents now representing more than 30% of total assets, compared with just 14% in 2023. Most of that capital is sitting in short-term Treasury bills, earning modest returns but keeping Berkshire nimble should markets dislocate. The stockpile has ballooned nearly 350% since 2022, underscoring Buffett’s trademark patience—and his reluctance to chase valuations that he perceives as stretched. Analysts say the massive cash position effectively acts as a “market fear gauge,” signaling that Buffett and his investment deputies, Ted Weschler and Todd Combs, see limited opportunities to deploy capital at attractive prices.

In contrast to the flood of corporate buybacks across the S&P 500, Berkshire has abstained from repurchasing any of its own shares for five straight quarters. That decision speaks volumes about Buffett’s assessment of Berkshire’s valuation. Under his buyback framework, the company only repurchases stock when he deems it to be trading below intrinsic value, “conservatively determined.” The prolonged pause suggests Buffett doesn’t view shares as cheap enough, even after a double-digit pullback from all-time highs earlier this year. Class A and B shares are up roughly 5% year-to-date—lagging the S&P 500’s 16% advance—and now trade near 1.5 times book value, in line with their five-year average but well below their peak multiple of 1.8x reached last spring.

In his quarterly commentary, Buffett emphasized that shareholders should focus on operating earnings rather than the volatile investment line, noting that accounting rules require unrealized equity gains to be included in net income. He also acknowledged the challenges of finding “elephants”—large, value-creating acquisitions that fit Berkshire’s disciplined criteria. “The opportunities for deploying capital on the scale we prefer remain limited,” Buffett said, though he added that Berkshire’s decentralized structure and liquidity allow it to “act decisively when markets present value.” That remark has fueled speculation that Buffett is waiting for a market correction or a distressed sale to put his $382 billion in cash to work.

Among its portfolio holdings, Berkshire remains heavily concentrated in American Express, Apple, Bank of America, Chevron, and Coca-Cola, which together make up about two-thirds of its equity portfolio’s value. However, filings suggest Buffett has been trimming select positions—potentially Apple and Bank of America—while modestly adding to smaller holdings such as Pool Corp. Berkshire was again a net seller of equities for the twelfth consecutive quarter, unloading roughly $6 billion in stocks while investing only about $6.4 billion.

The succession question continues to hang over Omaha as Buffett, now 95, prepares to step down as CEO at year-end. Vice Chairman Greg Abel, who oversees Berkshire’s non-insurance operations, is set to assume the top role, while Buffett will remain chairman and continue to influence capital allocation decisions. Investors widely view Abel as a steady successor, though many analysts believe the “Buffett premium”—the valuation edge Berkshire enjoyed due to Buffett’s stewardship—has begun to fade. Shares have lagged the broader market since May, when Buffett formally announced his retirement timeline.

Still, Berkshire’s financial foundation remains formidable. Insurance float rose to $176 billion, book value per Class A share hit a record $485,000, and the company’s operating income outpaced Wall Street estimates by nearly 9%. Even adjusted for currency effects, operating profits rose roughly 17%, an impressive showing amid slowing global growth and softening rates. With a fortress balance sheet, a proven succession plan, and nearly $400 billion in dry powder, Berkshire Hathaway continues to embody Buffett’s long-held mantra: “Be fearful when others are greedy, and greedy when others are fearful.” Right now, Berkshire looks content to wait—and the market is watching closely to see when, and where, the Oracle’s next move will strike.