With over $180 billion in cash at Berkshire Hathaway, why isn't Warren Buffett making any investments yet?

Berkshire Hathaway's first quarter financial report for 2024 shows that as of the end of the first quarter, Berkshire's cash reserves further increased to $189 billion, setting a new record high from the previous quarter. Among them, the company holds $35.5 billion in cash directly, and holds $153.44 billion in short-term US Treasury bonds. The amount of highly liquid short-term US Treasury bonds held has continued to grow from $129.6 billion in the previous quarter, earning substantial interest income in a high-interest rate environment.

At the beginning of the subsequent shareholders' meeting, Buffett stated to shareholders that by the end of this quarter, Berkshire's cash holdings are expected to increase to $200 billion. "I think a reasonable assumption is that by the end of this quarter, cash and short-term US Treasury bonds may reach around $200 billion."

Buffett added, "We are eager to spend money, but we won't spend it unless we believe the investment target is low-risk and can make us a lot of money." Buffett admitted in his shareholder letter in February this year that in the United States, "only a few companies" meet Berkshire's investment criteria, while there are "basically no qualified candidates" elsewhere in the world.

During the Q&A session, some investors continued to ask, what is Berkshire waiting for with over $180 billion in cash?

Buffett said, "This is a good question. None of the people on stage have good ideas on how to use this money well. We won't use this money at the current 5.4% interest rate, as the interest rate is so high now. We only swing the bat at the right time, but in fact, many people swing the bat all the time because they think that by swinging continuously, they will eventually hit the right target."

Buffett also jokingly remarked that they shouldn't tell the Federal Reserve about the high interest rates.

Buffett stated that we no longer need to exceed a certain return as before, as we cannot find as many opportunities now, and there are not enough attractive targets for me to allocate so much capital. We will see if there are any changes in the future.

Regarding Berkshire's massive cash holdings, Buffett also mentioned why the company does not use this cash to pay dividends. Buffett has stated that not paying dividends is because he hopes to use capital in a more profitable way. Furthermore, if he feels that he cannot effectively use his capital, he will use a share buyback plan to return capital to shareholders instead of paying dividends.

The specific logic behind Buffett's operation is that dividends imply a commitment to continuously pay dividends and not reduce them. Between buybacks and dividend payments, Buffett tends to favor share buybacks.

Berkshire's latest financial report shows that in the first quarter, Berkshire repurchased $26 billion worth of company stock, higher than the $22 billion in the previous quarter but nearly halved from the $44 billion repurchased in the first quarter of last year, which was the largest buyback amount in two years. In 2023, the company repurchased $92 billion