'Warren Buffett's cash call makes sense after all': Hedge fund manager on $325B cash pile

Warren Buffett’s decision to hold onto a record $325 billion in cash is drawing attention from market watchers. On Thursday, hedge fund manager Anurag Singh said Buffett’s decision to sitting on cash is making sense. “Warren Buffett's cash call of $325 BN i.e., ~50% of portfolio does make sense after all. When stocks are pricing too much optimism, all risk lies with the investors. Funds won’t teach you this. Markets certainly will!” Singh wrote in a post, echoing concerns over excessive market optimism.

Berkshire Hathaway’s cash reserves reached an all-time high of $334.2 billion by the end of 2024, up from $325.2 billion in the third quarter. While Buffett’s conglomerate posted strong operating profits, particularly in its insurance business, what caught investors’ attention was the company’s aggressive stock sell-off without reinvesting capital into equities.

Throughout 2024, Berkshire reduced its stakes in major holdings like Apple and Bank of America but chose to sit on cash instead of making big new investments. The move signals Buffett’s cautious outlook on the market, aligning with the sentiment that equities may be overpriced and risk-laden.

Singh’s post comes amid mounting warnings of a market downturn, with investor Robert Kiyosaki predicting what he calls the “biggest crash in history”. "THE EVERYTHING BUBBLE is bursting," Kiyosaki recently wrote on X, adding, "I am afraid this crash may be the biggest in history."

Kiyosaki's concerns are reinforced by major stock market declines. The Nasdaq Composite recently plunged over 4% in a single day, while the S&P 500 fell 2.7%, extending an 8.5% drop from its all-time high in February. Meanwhile, the S&P 1500 Supercomposite Index has erased nearly $4.9 trillion in value since mid-February, reflecting deepening investor anxiety.

Kiyosaki linked the crisis to economic mismanagement in major economies like the US, Germany, and Japan, stating that "incompetent leaders led us into a trap...giant crash." He also pointed to his book Rich Dad’s Prophecy, where he had previously predicted a severe market collapse.

Concerns over a potential recession are growing, fueled by US trade policies and inflation risks. A Reuters poll of economists in the US, Canada, and Mexico found that 70 out of 74 experts believe recession risks have increased. Goldman Sachs has already cut its 2025 US growth forecast, citing “more adverse tariff assumptions” alongside rising inflation threats.