Warren Buffett Has More Invested in This Than He Does in Bank of America, American Express, Coca-Cola, and Chevron Combined -- and It's Not Apple

Kids (and many adults) enjoy trying to find a character named Waldo in different settings in the children's book series Where's Waldo?. It can sometimes take a little time to find Waldo, but the challenge isn't too difficult.

Some investors play a different game that you could call, "Where's Warren's money?" I'm referring, of course, to legendary investor Warren Buffett. He has achieved such tremendous success through the years that the holdings in Berkshire Hathaway's (BRK.A -0.76%) (BRK.B -0.69%) portfolio serve as an idea list for some.

So where is Warren's money these days? Berkshire's holdings include dozens of great stocks. But Buffett has more invested in one asset than he does in Bank of America (BAC -0.21%), American Express (AXP -0.62%), The Coca-Cola Company (KO), and Chevron (CVX 0.37%) combined. 

A billion here, a billion there...

First things first: It's not Apple (AAPL -0.35%). Yes, the tech giant is by far the largest position in Berkshire Hathaway's portfolio. Apple makes up more than 47% of the conglomerate's total holdings. Buffett's stake in the company has a current valuation of over $158 billion. 

Bank of America ranks as Berkshire's second-largest holding, making up a little under 8% of its total portfolio. American Express is in third place, followed by Coca-Cola and Chevron.

These four runners-up together account for close to 27% of Berkshire's equity holdings. The combined value of Berkshire's positions in the four stocks totals more than $90 billion. However, Buffett has put a much greater amount of Berkshire's cash into another investment -- U.S. Treasury bills.

As of June 30, 2023, Berkshire's short-term investments in U.S. Treasury bills topped $97 billion. The company also held another $24.5 billion in U.S. Treasury bills with maturities of three months or less. In total, Berkshire owned nearly $122 billion in Treasuries.

By the way, we don't have to stop with only Bank of America, American Express, Coca-Cola, and Chevron. We could also add in Berkshire's stakes in Occidental Petroleum and Kraft Heinz. Buffett's amount invested in Treasuries is still greater than its positions in all of those stocks combined.

Why Buffett is so heavily invested in Treasuries

Berkshire's policy is to always maintain at least $30 billion in cash, cash equivalents, and U.S. Treasury bills. But why is Buffett so much more heavily invested in Treasuries right now? There are three main reasons.

First (and arguably most important), the legendary investor doesn't think there are better alternatives available right now. Buffett has stated in the past that he prefers to have most of Berkshire's money in stocks. When stock valuations aren't attractive enough, though, he doesn't buy. It's no coincidence that Buffett has been a net seller of stocks so far in 2023. 

Second, Treasuries are offering significantly higher yields than they have in the recent past. For example, all of the U.S. Treasury bills with maturities of one year or less currently boast yields of at least 5.39%.

Third, there isn't a safer place to park money than Treasuries. They're backed by the full faith and credit of the U.S. government. Political shenanigans in Washington D.C. might scare investors from time to time. However, representatives won't allow the government to default on its debt payments because they understand just how dire the consequences of doing so would be.

Should you follow his lead?

Your investment goals could be quite different from a huge conglomerate like Berkshire Hathaway. It's not a good idea to blindly follow Buffett's lead all the time. I think, though, that owning U.S. Treasuries could be a smart move for many investors in the current environment.

Keep in mind that U.S. Treasury bills are, by definition, short-term with a maturity of one year or less. Longer-dated Treasury bonds could expose you to added risks. For example, if you need the cash sooner than the maturity date, you could lose money if the bond prices fall as a result of higher interest rates. Buffett doesn't tie up much of Berkshire's money in longer-term Treasury bonds for this reason.

Short-term Treasuries, though, can allow you to make money in a safe way when you can't find stocks that you like. When you do find them, you won't have to wait long to free up the cash to buy them.