Warren Buffett, warning of ‘scoundrels’ and ‘fiscal folly,’ slashes his exposure to U.S. stocks

It surely says nothing cheerful that Warren Buffett, the world’s most famous and successful investor, now holds more than half of his company’s net assets in cash and Treasury bills.

Or that the legendary chairman of the Berkshire Hathaway BRK.A BRK.B conglomerate now has more in cash than he does in traded U.S. stocks.

• ‘She’s still waiting by the phone’: My grandmother gave her life savings to a man she met online. What now?

• ‘I’ve opened a hornet’s nest’: My mother-in-law lists my husband as beneficiary on her $1 million IRA. But her will says otherwise. Which wins?

• ‘My retirement is going to be a disaster’: I’m 59 and have $45,000 in my 401(k). I earn $72,000. Am I doomed?

• ‘She acted as a mother to me growing up’: My stepmother remarried after my father died. How can I claim my inheritance?

• ‘It is hard to watch them buy a Mercedes’: My father left $600K to my stepmother. Her family put the money in a trust. Is my inheritance lost?

Or that in his latest annual letter to investors, the 94-year-old has taken a break from his usual patriotic boosterism, and instead is warning about the risks to America from “fiscal folly” and from “scoundrels and promoters” who “take advantage of those who mistakenly trust them.”

“The American process has not always been pretty,” he wrote.

It’s a far cry from his usual cheerleading. It’s only four years since he was writing: “Never bet against America.”

But for those scouring his latest annual report for profitable opportunities, Buffett’s comments and financial data suggest that the stocks of the five Japanese “mini-Berkshire” conglomerates he’s been buying since 2019 look like good value.

Buffett — whose longtime Berkshire vice chairman, Charlie Munger, died just over a year ago — is the world’s seventh-richest man with a net worth of $150 billion, according to Forbes. He has made all his money by investing in the stock market since the 1950s, first through a private partnership and then through the publicly traded Berkshire Hathaway investment vehicle.

During that time, he has vastly outperformed stock-market indexes. His stock-picking skills are the stuff of legend — although at least one analysis argues that one of his great secrets was that he simply stuck to buying stocks in high-quality companies, and did so using cheap money from his insurance operations.

The most interesting part of Buffett’s annual report is the balance sheet. Berkshire Hathaway’s holdings of cash and equivalents — mainly U.S. Treasury bills — has hit a record $345 billion, according to the latest figures. That is nearly twice the level of a year ago, and now accounts for a staggering 53% of the company’s net assets.