Berkshire Hathaway Holds $397 Billion in Cash as Equity Valuations Stay Stretched

Berkshire Hathaway has built a cash and Treasury-equivalent reserve nearing $397 billion, marking one of the largest liquidity positions in its history. The company has deployed this capital into short-duration U.S. Treasury Bills, capturing current yields while avoiding the interest-rate risk tied to longer-dated bonds. Analysts view the move as a calculated response to historically thin equity risk premiums and elevated price-to-earnings multiples in the broader market. The strategy effectively positions Berkshire to deploy capital rapidly if asset valuations revert to levels the firm considers attractive. A key challenge remains the so-called Law of Large Numbers, as finding investment opportunities large enough to meaningfully deploy hundreds of billions without disrupting markets is increasingly difficult.