Warren Buffett has scooped up several stocks for Berkshire Hathaway's (BRK.A -0.76%) (BRK.B -0.69%) portfolio this year. He's added significantly to several positions. The legendary investor has also initiated new stakes in a handful of companies.
But one of Buffett's favorites hasn't received nearly as much attention. Here's where Buffett has invested over $100 billion of Berkshire's money right now.
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Berkshire's second-biggest position
I'm not referring to Apple (AAPL -0.35%), by the way. Sure, Berkshire owns nearly $179 billion worth of the technology giant. That's enough to make Apple by far the biggest holding in Berkshire's portfolio.
Buffett also has more than $100 billion invested in another security. Is it Bank of America or American Express? Maybe Coca-Cola? No to all of these.
Actually, Berkshire's second-biggest position isn't a stock. As of March 31, 2023, the conglomerate had nearly $104 billion piled into U.S. Treasury bills.
U.S. Treasury bonds come with various maturities all the way up to 30 years. However, Treasury bills are all short-term investments with maturities of one year or less.
"Every Monday"
Buffett stated in a CNBC interview earlier this year that Berkshire buys U.S. Treasury bills "every Monday." He said that "the only question is whether we buy three months or six months [maturities]." This isn't anything new for Berkshire Hathaway. Buffett told CNBC's Becky Quick, "[O]n Monday, we always buy Treasury bills."
That's in line with what Buffett wrote in his latest letter to Berkshire Hathaway shareholders: "Berkshire will always hold a boatload of cash and U.S. Treasury bills."
What is different, though, is just how much cash Berkshire is investing in Treasuries. Berkshire currently has one of the highest levels of short-term investments in the company's history. In addition to its Treasury bills, the conglomerate also has $23.8 billion in cash and cash equivalents.
BRK.B short term investments (quarterly) data by YCharts.
Why such a massive stockpile? It's almost certainly because Buffett believes that most stocks are overvalued right now. The metric that he once said was "probably the best single measure of where valuations stand at any given moment" supports that view.
The "Buffett indicator" divides the total market cap of the stock market by the country's gross domestic product (GDP). And the U.S. version of the indicator is currently higher than it was in 2000 before the dot-com bubble burst.
Be like Buffett?
Buffett has put an amount worth nearly 14% of Berkshire Hathaway's total valuation into Treasury bills. Should you be like Buffett?
Some might be leery of investing so heavily in Treasuries. After all, the stock market is booming so far in 2023. You could have a fear of missing out on even greater gains. But there are two key arguments in favor of Buffett's approach.
First, there's the fact that valuations truly are at historically high levels. It could be just a matter of time before the market runs out of steam.
Second, Treasury bills currently provide pretty good returns. All short-term Treasuries have yields of more than 5% right now. And they're widely viewed as the safest investments on the planet.
I'd add one other factor to consider: Buffett has been a successful investor for a long time. When he thinks it's prudent to build up a huge stockpile in Treasuries, he's probably right.
