In a post on social media platform X (formerly known as Twitter), Helios Capital founder Samir Arora, wrote about the “difficulty of sitting on cash”.
Using investment guru Warren Buffett as an example, Arora noted that the ‘Oracle of Omaha’ is “sitting on $280 billion of cash” at present and “$150 billion in the last two years”, for which his loss from not investing in the US market during that time, when it grew around 50 per cent (between September 2022-2024).
‘Opportunity Loss’
“He therefore lost 40 per cent (after making 5 per cent p.a. from investing in treasuries, etc.) on $150 billion — which is a loss of $60 billion due to not investing in the market,” Arora calculated.
“Now he has $280 billion cash. So to recover this opportunity loss of $60 billion, market must fall by over 20 per cent for this trade to break even. To add real value the market must fall some 30 per cent from here, and then he would have added some marginal alpha on the trade. You decide whether it is worth it,” he wrote on X.
A Littlle Humour
He added that the second problem with sitting on part cash is — “What do you pray for every morning”.
“Second problem with sitting on part cash: What do you pray every morning? That markets go down because you have some cash or that the markets go up because you have major investments in the market? Can get very confusing for both you and God,” he quipped.
Arora added a note at the end, disclosing that Helios Capital‘s global fund is invested in Berkshire A and B shares.
Warren Buffett’s cash holding nears $280 billion
Buffett’s Berkshire Hathaway, sold nearly half its stake in tech giant Apple, offloading nearly 50 per cent of the shares, leading to a rise in his cash holdings to almost $280 billion, as per reports in August 2024.
Selling off a big chunk of Apple shares was a significant move for Buffett, who used to call Apple the pillar of Berkshire’s business. Along with Apple, the company also sold BYD and Bank of America shares in the same quarter, as per an AP report.
