While the broader market contends with geopolitical tension, sticky inflation, and poor returns, Buffett’s Berkshire Hathaway (NYSE: BRK.B) is sitting on a staggering $347.7 billion in cash as of Q1 2025. This marks the highest cash reserve in the company’s history, and for seasoned observers, it’s telling.
Warren Buffett isn’t diving headfirst into tech rallies or betting on interest rate cuts; he’s waiting patiently for valuations that make sense.
Over the past quarter, Berkshire’s portfolio has trimmed its exposure to major banks, exiting its stake in Citigroup and paring back Bank of America. Simultaneously, it doubled down on companies like Constellation Brands, known for its consumer staples and resilient margins.
Beats inflation, every time
Even with billions in cash at the ready, Buffett insists the smartest investment isn’t a stock or a sector—it’s you.
At a Berkshire shareholder meeting in 2022, he reaffirmed this view:
“Whatever abilities you have can’t be taken away from you. They can’t actually be inflated away from you. The best investment by far is anything that develops yourself, and it’s not taxed at all.”
In classic Buffett fashion, it’s both brilliant and so simple it almost sounds too obvious. But it makes total sense. Unlike your stock portfolio, which can tank on a bad CPI report, your skills, education, and relationships appreciate over time, and no market correction can touch them.
This advice isn’t new, either. In fact, Warren Buffett has been championing it for decades. During a 1998 appearance at the University of Washington alongside Bill Gates, Buffett urged students to invest not in the market, but in themselves.
He told the audience that most people go through life using only a fraction of their potential. The best investment, he argued, isn’t a stock or asset class—it’s personal growth. “Anything you do that invests in yourself,” he said, “that’s the best investment you can possibly make.”
Buffett also cautioned against chasing money or status. Instead, he encouraged students to pursue work that energizes them, saying, “You really want to be excited when you get out of bed every morning.” Even if the first job isn’t your forever job, he noted, it’s the learning that compounds over time.
Reflecting on his own career, Buffett recalled taking a job with his mentor, Ben Graham, without ever asking about salary. “I found out at the end of the month when I got my first paycheck what I was earning,” he said, “because I just knew it was the right thing to be doing.”
Beyond self
For those looking beyond the self, Buffett’s advice is clear: look for businesses that don’t need constant reinvestment to stay afloat, especially when inflation is running high. At the 2015 Berkshire Hathaway meeting, he said the best companies during inflation are the ones you can “buy once” and not have to keep sinking money into as costs rise.
He pointed out that capital-heavy industries like railroads or utilities tend to struggle in that kind of environment because they keep needing more cash just to operate. Instead, Buffett favors companies with strong brands—ones people feel connected to and will keep buying from no matter what.
As he put it: “a brand is a wonderful thing to own during inflation.”
The takeaway? Stick with companies that have pricing power, low capital needs, and loyal customers—like software providers or well-loved consumer brands.
Featured image via Shutterstock.
