This Is Warren Buffett's Top Holding in His Berkshire Hathaway Portfolio -- and It's Not Apple

Don't be fooled by the fact that Warren Buffett reduced Berkshire Hathaway's stake in Apple by nearly 13% in the first quarter of 2024. The iconic investor still really likes Apple and plans to own the stock for a long time to come.

Berkshire's 5.1% stake in Apple is worth over $150 billion. However, the tech giant isn't Buffett's top holding in his Berkshire Hathaway portfolio.

Warren Buffett.

Cash is king

To be sure, Apple remains by far the top stock that Berkshire owns. But Buffett and his team have invested more heavily in another asset -- U.S. Treasury Bills. As of March 31, 2024, Berkshire had $156.2 billion in Treasuries, up from $129.6 billion at the end of 2023.

U.S. Treasuries make up the biggest part of Berkshire's overall cash position. Adding the conglomerate's cash and cash equivalents at the end of Q1 to the Treasuries figure gives a total cash stockpile of $182.3 billion.

This number is likely to increase. Buffett said at Berkshire's recent shareholder meeting, "I think it's a fair assumption that they'll [cash and Treasuries] probably be at about $200 billion at the end of this quarter."

It's not unusual for Berkshire to build a big cash position. However, the company has never had as much money in cash, equivalents, and short-term investments as it does now.

Why Buffett has amassed such a huge cash stockpile

The obvious question is: Why has Buffett amassed such a huge cash stockpile? He provided an answer at Berkshire's shareholder meeting. Buffett stated, "I don't mind at all under current conditions building the cash position. When I look at what's available in equity markets and the composition of what's going on in the world, we find it quite attractive."

It's easy to understand the first part of his response about "what's available in equity markets." Buffett has moved beyond the purist value investing approach espoused by his mentor, Benjamin Graham, but he still views valuation as a critical factor in buying a stock.

The overall stock market is expensive using nearly any valuation metric. The S&P 500 cyclically adjusted price-to-earnings (CAPE) ratio is near its third-highest level ever. Some stocks are still attractively valued (as evidenced by Buffett's limited buying in recent quarters). However, the legendary investor continues to sit on the sidelines for the most part.

Buffett didn't elaborate on what he meant by "the composition of what's going on in the world." He could have been thinking of stubbornly high inflation keeping interest rates (and Treasury yields) at relatively high levels.

Should you have plenty of cash on hand too?

Ordinary investors shouldn't blindly copy the moves of famous investors like Buffett. However, it can be wise to follow in their footsteps at times. Should you have plenty of cash on hand too? The answer is... it depends.

If you're an active stock picker, building a larger cash position makes sense. Valuations will become more attractive when the inevitable pullback happens. A solid cash stockpile will allow you to buy great stocks at a discount. You can bet that's what Buffett will do when the opportunity arises.

On the other hand, if you invest regularly (monthly, quarterly, etc.), your best approach is to continue doing so. Although you'll sometimes buy at premium prices with dollar-cost averaging, you'll also buy at cheaper prices at other times.

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Keith Speights has positions in Apple and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool has a disclosure policy.