Speculation is bound to run riot as to the reasons behind such hoarding, especially when Buffett himself reminds us in his latest letter to shareholders, published over the weekend, that he will "never" favor holding cash over shares in fine companies.

This message will no doubt go unheard by those who think they are reading between the lines a genuine bet on a market downturn by the Oracle of Omaha, king of value investors, i.e. those inclined to invest in companies - whether listed or private - only on condition that their valuations evolve far below their intrinsic values.

In this respect, Berkshire's latest bets have not all been successful, as illustrated by the poor performance of its investment in Occidental Petroleum and the premature liquidation of its stake in Citi. 

On the other hand, our investments in Japan have been an outstanding success. Not only has their market value doubled in two years, but Warren Buffett has lost none of his arbitrage skills: financed by yen-denominated fixed-rate debt, these investments cost Berkshire $135 million a year in interest; against this, they will pay out $812 million in dividends this year.

Returning to the unprecedented levels of liquidity in Berkshire's asset base, we reminded you six months ago that these were not entirely free and deployable either. Berkshire's insurance and, even more so, reinsurance operations, with their emphasis on so-called "super-cat" contracts - designed to cover major, unlikely but extremely costly catastrophes when they occur - oblige the group to set aside substantial reserves.

At the end of 2024, Berkshire's reserves were in line with average levels, both in relation to the volume of its insurance business, and when adjusted for the fresh gains - still close to $120 billion - from the partial disposals of Apple and Bank of America. 

Buffett's true orientation towards the equity markets is partly revealed by the asset allocation within the Berkshire pension plan. Roughly two-thirds of the plan is invested in equities, with the remaining third in fixed-rate products. In relation to the plan's profitability targets, this probably indicates return expectations for the equity market that are fairly close to their historical averages.

The Omaha-based conglomerate's imposing cash position remains in line with the valuations of the very large companies that now constitute its only exploitable investment universe. By way of illustration, Berkshire's total liquidity represents less than three-quarters of the market capitalization of groups such as Netflix or Exxon.