Why does Warren Buffett keep only 1% of his assets in cash?



Despite owning a fortune of nearly $100 billion, billionaire Warren Buffett only holds about $1 billion in cash.

"Cash is King" is a popular motto, but for legendary investor Warren Buffett - one of the most powerful investors in the world - is completely different.  He only keeps 1% of his fortune in cash.

Why does Warren Buffett keep only 1% of his assets in cash?Why does Warren Buffett keep only 1% of his assets in cash? / ph: instagram@warrenibuffett

 According to the Bloomberg Billionaire Index, billionaire Warren Buffett - CEO, chairman and also the largest shareholder of the investment empire Berkshire Hathaway - owns nearly $98 billion, but he only holds about $1 billion in cash.  This billionaire used to oppose keeping cash instead of buying stocks.

 "I would say that the worst investment is keeping cash. Everyone says that cash is King, but in Meanwhile, good businesses will be increasingly valuable in the long term. " said the 90-year-old billionaire.

Warren Bufffett is currently CEO and chairman and also the largest shareholder of the investment empire Berkshire Hathaway.  With such a viewpoint, he runs Berkshire Hathaway, which invests in a number of businesses around the world.  Berkshire Hathaway currently owns GEICO, Fruit of the Loom, Helzberg Diamonds, Pampered Chef, Forest River, Duracell, Dairy Queen, BNSF, Lubrizol, Long & Foster, FlightSafety International, and NetJets.  The company owns stakes in many listed companies including Apple, Bank of America, Kraft Heinz Company, American Express and The Coca-Cola Company.

 Currently, Berkshire Hathaway stocks are the most expensive stock code in the world at more than $380,400/stock and up about 48% last year.

 The July 2020 U.S. Securities Commission filing by Berkshire Hathaway shows that the majority of Warren Buffett's assets comes from his shares in Berkshire Hathaway as well as a 15% return on this company.

Many experts aggree that the value of cash will decrease over time due to inflation.  In some developed economies such as the US, despite low inflation, the prices of goods and services have still increased more strongly than the profits from cash investment.

 In addition to the risk of inflation, in some cases cash depreciates faster than investing in gold or even Bitcoin.  However, there is a fact that the rich and super rich often keep a large amount of cash to buy or invest in assets in the future.

Why does Warren Buffett keep only 1% of his assets in cash?

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