But how? What did he do differently? More importantly, what can you learn from it?
Let’s break it down.
“How’s the market bloodbath feeling?” a friend casually asked.
It’s a valid question. With markets correcting sharply in 2025, many investors were scrambling. But those who had prepared—like Buffett—were just sitting tight.And if there was ever a time to feel part of the Buffett tribe, this was it.
Buffett’s Secret? Doing Nothing!
While others were riding the euphoric highs of 2024’s bull market, Buffett was quietly exiting. Berkshire Hathaway sold a staggering $134 billion worth of equities.
And then?
He didn’t chase the AI wave. Didn’t bet on crypto. Didn’t initiate buybacks or jump into hot IPOs.
Instead, he took all that money and parked it into boring but safe US Treasury Bills—earning about 5% annually. That’s more than $14 billion in interest income a year for just sitting on the sidelines.
As of now, Berkshire holds $330 billion in cash, with a majority in short-term Treasuries. To put that in perspective, that’s more than the combined market value of Starbucks, Ford, and Zoom.
This wasn’t random. This was classic Buffett.
But Why Did Buffett Sell?
1. Valuations Were Too High
Buffett is obsessed with buying quality at a fair price. Not at any price. And in 2024, he saw the market soaring beyond reason.
His favorite warning signal—the Buffett Indicator (Total Market Cap to GDP)—had breached 200%, a level he once called “playing with fire.”
Historically, such levels preceded major market crashes. The last time this ratio peaked so high was just before the dot-com bubble burst in 2000 and the Great Financial Crisis in 2008.
Another red flag? The S&P 500’s price-to-book ratio, which hit levels not seen since the late ’90s—another period of overvaluation.
2. The Return of Trump & Tariffs
With Trump’s return to power came talk of tariffs. Again.
Buffett has previously likened tariffs to economic warfare. And Berkshire doesn’t make bold moves when the world is on the verge of a trade war. Instead, Buffett’s rule is simple: Don’t lose money.
3. No Good Deals
Despite all that cash, Buffett didn’t go on an acquisition spree. Why? Everything was just too expensive. The valuations didn’t justify action. So, he stayed patient.
And that patience paid off.
This Isn’t Buffett’s First Rodeo
Let’s rewind.
- In 1999, as dot-com mania soared, Buffett didn’t join the frenzy. He waited for the crash—and then bought.
- In 2008, during the financial crisis, he moved fast—bailing out Goldman Sachs and GE through strategic investments.
- In 2020, during the COVID crash, he was cautious—not because he lacked funds, but because the opportunities weren’t juicy enough.
Buffett has always done the opposite of the crowd. When others get greedy, he becomes fearful. And when others panic, he gets greedy.
The Power of Cash
Cash isn’t just protection. It’s power.
It gives you:
- The freedom to wait.
- The clarity to ignore hype.
- The firepower to strike when prices crash.
While markets panicked in 2025, Buffett wasn’t scrambling to sell. If prices fell further, he’d buy. If not, he’d collect interest. Win-win.
Also, Berkshire’s massive cash pile may also be part of a succession strategy. At 94, Buffett has already handed the reins to Greg Abel. That war chest? It’s not just a defensive shield. It’s a loaded gun for the next leader—ready to strike when the time is right.
Lessons From the Oracle of Omaha
- Restraint is a superpower
You don’t need a billion-dollar portfolio to invest like Buffett. Just the ability to wait. - Don’t overpay for hype
“It’s better to buy a great company at a fair price than a fair company at a great price.” That’s Buffett’s mantra. - Cash is underrated
Whether you’re eyeing stocks, real estate, or mangoes at your sabzi mandi, cash gives you options. You can walk away when the price is too high—and come back when it’s fair. - Act when fear returns
Buffett is already investing again—this time, in undervalued Japanese stocks. And he’ll keep doing what he’s always done—buy value when others are running scared.
Final Thoughts: What Can You Do?
You don’t have to be Warren Buffett. But you can learn from him.
- Build a little emergency fund—not just for emergencies but for opportunities.
- Stay calm when the markets turn red.
- Tune out the hype. Tune into value.
- Don’t fear sitting on cash if nothing looks good.
- Be ready. Because when others panic, that’s your time to pounce.
So, how’s the market bloodbath feeling to you?
If you’ve been playing it smart, pat yourself on the back. And if not, maybe now’s a good time to build that war chest.
(The author Chakrivardhan Kuppala is Cofounder & Executive Director, Prime Wealth Finserv. Views are own)
