Investors’ cash holdings are at a 15-year low — according to Bank of America’s global fund manager survey — while Warren Buffett’s Berkshire Hathaway (BRK-B, BRK-A) holds a record high of $325 billion in cash. Despite holding a record-high amount of uninvested cash, Buffett’s firm continues to buy up shares and expand its stake in oil giant Occidental Petroleum (OXY).
Portfolio Wealth Advisors president and chief investment officer Lee Munson joins Catalysts with Seana Smith and Madison Mills to discuss what Berkshire’s buying of Occidental and the legendary investor’s behavior signals for the wider market.
“A lot of this stems from a huge sale of Apple (AAPL) that [Buffett] did last year and he just has a bunch of cash and he’s slow to get it to use,” Munson says, adding, “[Berkshire has] been on a buying spree with Occidental, and I think that that’s something that is notable.”
“I think that what it really says is that this is a momentum market. It’s hard to find good value right now and I think that Buffett is waiting his time,” the strategist says, noting, “I don’t think we should think just because there’s a lot of cash it means the market is ready to fall, per se.”
Beyond Occidental, Buffett has added Constellation Brands (STZ) to his company’s portfolio while adding to his stake in Domino’s Pizza (DPZ), Pool Corporation (POOL), and SiriusXM (SIRI). Munson says Buffett is “just knee-deep in the value trade” rather than broader investment trades like artificial intelligence (AI).
To watch more expert insights and analysis on the latest market action, check out more Catalysts here.
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