Stock market strategies

FX Evolution: Warren Buffett Is Doing Something Strange…

Posted on by Andrew Packer

Markets have broken higher following a period of consolidation ahead of the U.S. election. This breakout has proven strong, and helped assets such as bitcoin rocket higher. That adds to significant gains since the start of 2024.

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    • However, not all investors have gone along for the ride. One of the most-watched investors in the market, Warren Buffett, has taken the opposite approach. He’s been selling stocks and increasing his cash position as markets shoot higher.

    On the surface, that could be a cause for concern. As a value investor, Buffett, through his holding company Berkshire Hathaway (BRK-B), may simply not see any good deals right now.

    It’s typical of Buffett to raise cash when markets are trending higher, and he often sits on a cash position of at least 20%. Today’s cash position however, is much larger at nearly 30%.

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    It’s possible Buffett could be gearing up for a large acquisition. He has approval to buy 50% of Occidental Petroleum (OXY). Typically, once Buffett buys half of a company, we’ll want to buy the second half in time.

    Another possibility was that Buffett was concerned over possible corporate tax rates. They were set to chance at the end of 2025 and shift higher. Given the election results, it’s likely that rates stay low into 2025 and beyond.

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    For the full analysis on Buffett’s cash position now, click here.