Warren Buffett has more money invested in this than Apple, AmEx, Bank of America, Coke, Chevron and Oxy Combined

What is Warren Buffett’s largest holding? Berkshire Hathaway portfolio? If I were asked this question, my automatic answer would be Apple (AAPL 0.37%). But I would be wrong.

Yes, Apple remains Buffett’s largest holding. However, it is not his greatest position. Buffett has more money invested in a single asset than he has in Apple, American Express, Bank of America, Coca cola, Chevronand Occidental Petroleum mix.

Image source: The Motley Fool.

By far, Buffett’s largest holding

Berkshire Hathaway has big money invested in its top five stocks. His stake in Apple is worth $90.7 billion, even after Buffett nearly halved the conglomerate’s position in the iPhone maker. Berkshire’s stake in AmEx is worth nearly $38.5 billion. Bank of America is a close third, with Berkshire’s position at about $37 billion.

The next largest position in Berkshire’s portfolio is Coca-Cola, with Buffett’s 400 million shares worth about $28.3 billion. Two oil stocks round out the top six, Chevron and Occidental, with Berkshire’s stakes totaling nearly $17.6 billion and $14.6 billion, respectively.

In total, Berkshire’s positions in these six stocks are currently valued at nearly $227 billion. That’s a lot of money, but not as much as Buffett has invested in another asset.

As of June 30, 2024, Berkshire Hathaway’s short-term investments in US Treasuries totaled $238.7 billion. That amount includes $4.1 billion of the conglomerate’s $42.3 billion in cash and cash equivalents invested in short-term U.S. Treasuries with maturities of three months or less.

Why does Buffett have so much money in the US treasury?

Berkshire has an ongoing policy of maintaining at least $30 billion in cash, cash equivalents and treasury stock. However, that threshold is much lower than the current level, which is the highest ever for the conglomerate. Why does Buffett have so much money invested in US Treasuries right now?

Buffett answered this question in his 2021 letter to Berkshire Hathaway shareholders. At the time, Berkshire’s balance sheet included $120 billion in U.S. Treasuries plus another $24 billion in cash. He wrote at the time that the large amount was “a consequence of my failure to find whole companies or small parts of them (i.e. tradable shares) that meet our long-term holding criteria.”

That begs the question: What are Buffett’s criteria for buying businesses and stocks? He has answered this in the past as well. In the legendary investor’s 2013 letter to Berkshire shareholders, Buffett said he would only invest in businesses and stocks that:

• He could “reasonably estimate” a range of earnings for at least five years into the future.
• Be reasonably priced compared to the lower end of the expected earnings range.
• I am in his “circle of competence”.

There are undoubtedly plenty of stocks for which Buffett can derive sensible estimates of future earnings. A lot of actions are also in his “circle of competence”. I think Berkshire’s huge position in Treasures is primarily because the stock’s valuations are too high for him to want to buy — with a few exceptions, of course.

Should You Also Buy Treasuries?

Your investment goals are almost certainly different from Buffett’s. But while I doubt most investors will want their largest position to be in US Treasuries, having some of your portfolio in assets might be wise. Treasuries are a great place to park your cash for the short term while you wait for a possible opportunity to buy stocks at more attractive prices.

I do think, however, that some areas of the market already offer attractive valuations. In particular, many small-cap stocks are bargains after lagging well behind large-cap stocks in recent years. With interest rate cuts likely to be on the way, they could perform well going forward.