Is it possible that the record high in cash reserves is due to more and more profit-taking, and that currently, there are no worthwhile buying opportunities?
PhyrexNi
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Warren Buffett's Berkshire Hathaway sold some assets again in the first quarter of 2025 in exchange for more cash, bringing the current cash amount to a historic high of $347.7 billion.
The giant whale has begun to raise larger cash reserves, and as a dead bull in dollars, Buffett also mentioned that he can hold other (national) currencies. He expressed his views on the recent volatility in risk markets, stating, "If Berkshire's stock price drops by 50%, I will see opportunities, not fear."
--- This is what I said, it may not be correct ---
The upcoming market is likely to present both opportunities and risks; the economy may not be as good as we imagine, and maintaining high interest rates will inevitably increase the risk of recession.
Since 1945, there have only been two instances where the U.S. federal funds rate exceeded 4.5% without an economic recession, one in 1966 where there was no recession but a clear economic decline, and only in 1984 was it smoothly navigated without economic impact.
Historically, there have been nine instances where interest rates exceeded 4.5%, of which seven resulted in either recession or significant economic downturns, and only once was it navigated smoothly. So, will this time be an exception?
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