The US and other global investors are making a beeline for tech and AI stocks, but ace investor Warren Buffett is now doing the opposite. The self-made billionaire is not blindly chasing the latest news on AI and is picking something else that investors are avoiding. The leading investor believes you should invest in a business you understand and not merely invest in a fad that everyone’s talking about.
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So What’s Warren Buffett Buying?
While Warren Buffett does own tech and AI stocks, he’s now focusing on two things. Warren Buffett is now hoarding Treasury bills (T-bills) and extending his pile of cash. T-bills are short-term debt instruments issued by the government to finance its short-term expenses. They are mostly sold at a discount to their face value and pay the full face value upon maturity. The difference amount is the investor’s profit and is mostly low-risk since it’s backed by the government.
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The latest data shows that Warren Buffett’s investment arm, Berkshire Hathaway, owns $314 billion in T-bills. That’s 5% of the overall $6.15 trillion T-bill market. In an interview, Buffett explained that he prefers T-bills due to their quick liquidity status. He is patient when the market soars and liquidates the T-bills to accumulate more stocks when a crash occurs. The ace investor is patient enough to wait for the crash and barely jumps all-in.
On the other hand, Warren Buffett is also extending his cash pile and has reached $382 billion. He is not investing it anywhere, and commentators point out that a major crash might be on the cards, and he’s waiting for the opportunity. It is most likely that he expects a market crash that everyone fears, and he remains greedy, which is mostly his main investment ideology. “Be fearful when others are greedy, and greedy when others are fearful,” is what he famously once said.