Warren Buffett, the legendary investor and chairman of Berkshire Hathaway, has never shied away from challenging conventional wisdom. But if 2008 Warren Buffett talked with 2025 Warren Buffett, they might not agree on the current state of Berkshire Hathaway (BRK.B) (BRK.A). 

Amidst the financial collapse of 2008, Berkshire was doing damage control, much like everyone else. They were investing heavily in the markets as they looked to continue buying up great names at cheap prices — the Buffett way. But amidst the darkest days in the market, Buffett published an op-ed in The New York Times telling companies to invest their cash and stop sitting on the sidelines. This was likely an attempt to instill confidence in the markets during a widespread free-fall, but the point still stands regardless of market conditions: 

“Today people who hold cash equivalents feel comfortable. They shouldn't. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value.”

Yet, more than a decade and a half later, Warren Buffett is one of the largest holders in the world of U.S. Treasury Bills, holding 5.1% of all outstanding T-bills. 

At the time, investors were still in fear of where markets could bottom after the 2008 financial crisis, and many sought the apparent safety of cash and cash equivalents like Treasury bills and money market funds. Buffett cautioned that this comfort was an illusion, especially for those with long-term investment horizons.

The Philosophy: Cash as a “Terrible Long-Term Asset”

Buffett’s critique of cash is rooted in his broader investment philosophy: focus on assets that not only preserve but also grow purchasing power over time. Cash, he argues, is a “terrible long-term asset” because:

• Low Returns: Cash equivalents typically yield less than inflation, especially after taxes.
• Guaranteed Depreciation: Inflation erodes the real value of cash, meaning that what feels safe today can buy less tomorrow.
• Missed Opportunity: By holding cash, investors forgo the compounding returns offered by productive assets like stocks or real estate.

Buffett’s advice has always been to own “productive assets” — businesses, equities, or real estate — that generate income and appreciate over time, rather than assets that simply sit idle. But now, the Oracle of Omaha is opting for safety himself in a time of unprecedented valuation multiples, all-time highs, and very few ‘fat pitches’ coming his way. 

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This is something MicroStrategy (MSTR) Executive Chairman Michael Saylor pointed out earlier this year, saying that Warren Buffett is “destroying $3 billion per month” in shareholder value waiting for markets to correct themselves when assets like Bitcoin, or even the S&P 500 Index ($SPX), could return substantially more in the meantime. 

Recent Events: Cash Comfort in a High-Rate World

In 2025, the investment landscape has shifted. After years of near-zero interest rates, central banks around the world have raised rates to combat persistent inflation. Money market funds and short-term Treasuries now offer yields above 4%, making cash look more attractive than it has in decades.

Yet, even in this environment, Buffett’s warning rings true for long-term investors. Inflation, while lower than its 2022-2023 peak, remains above central bank targets in many economies. The real (inflation-adjusted) return on cash is modest at best, and the opportunity cost of not being invested in productive assets is significant. For example, the S&P 500 has rebounded strongly in 2024 and 2025, outpacing cash returns and rewarding those who stayed invested.

Berkshire Hathaway’s Approach: Cash as Optionality, Not a Destination

It’s important to note that Berkshire Hathaway itself often holds large cash reserves — currently over $347 billion. However, Buffett has repeatedly clarified that this is not an investment strategy, but a matter of prudence. Berkshire needs liquidity for potential acquisitions and to weather market shocks, not as a long-term store of value.

For individual investors, Buffett’s message is clear: cash is a tool, not a destination. It provides flexibility and safety in the short term, but it should not be the cornerstone of a long-term investment plan.

Lessons for Investors

Buffett’s critique of cash is as relevant in 2025 as it was in 2008. While cash can provide short-term comfort and liquidity, it is unlikely to preserve or grow wealth over decades. Investors seeking long-term financial security should heed Buffett’s advice:

• Don’t mistake comfort for safety: The real risk is losing purchasing power to inflation.
• Invest for growth: Productive assets like stocks and real estate offer the best chance to outpace inflation.
• Use cash strategically: Hold enough for emergencies and opportunities, but don’t let it become a permanent holding.

As markets continue to evolve, Buffett’s timeless wisdom serves as a guide for investors navigating both uncertainty and opportunity. The comfort of cash, he reminds us, is fleeting — while the rewards of disciplined, long-term investing endure.