economy
March 12, 2026
Warren Buffett: Cash is necessary 'like oxygen'—but it's 'not a good asset'
By the time Warren Buffett stepped down as Berkshire Hathaway CEO, the company held a record amount of cash while he hunted for attractive deals.
TL;DR
- Berkshire Hathaway held over $370 billion in cash equivalents at the end of 2025 upon Warren Buffett's CEO departure.
- Buffett cited external circumstances and the difficulty of finding sufficiently large investments as reasons for the substantial cash pile.
- He compared cash to oxygen: necessary for survival but not an exciting or productive asset.
- Buffett prefers investing in businesses and equities for their compounding growth potential over cash.
- He stated Berkshire will always prioritize owning good businesses over cash-equivalent assets.
- Historically, inflation erodes cash value, while investable businesses can adapt to monetary instability.
- Buffett generally advises long-term, diversified investing, often suggesting an S&P 500 index fund.
- Financial advisors typically recommend an emergency cash reserve of 3-6 months of expenses for everyday investors.
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