Buffett stops investing and keeps $100 billion in Cash

The recent step from the world mastermind investor Warren Buffet has baffled the investor’s community to a great extent. He has been running the Berkshire Hathaway Inc for the last five decades and this organization is holding $100 billion cash after the end of the second quarter. Though most of the investors will consider this huge amount of cash as the brilliant achievement of Mr. Buffet. He personally thinks this as a burden also. Since Berkshire doesn’t pay any dividend and most importantly they don’t purchase their own stock, reinvesting this money will be a difficult task for Mr. Buffet. According to the chief investment officer at Wedgewood Partners David Rolfe, reinvesting this money would be really tough since the Mr. Buffet is currently looking at the very small companies.

Mr. Buffet is also thinking about this issue as being investors he doesn’t want to see such a large amount of idle money for long period of time. However if the can strategically deploy the funds to the Shareholders of Century Link Center in Omaha, then it would be a great solution to this cash pile. However, the master mind has already built a holding in Apple Inc. to invest his money at the very beginning of this year. In the month of June Berkshire also made two small equity investment in the real estate and Home Capital Group Inc. Furthermore, Berkshire has already closed a deal worth of $9 billion with Texas largest utility company. Though this deal seems a little bit aggressive in the eye of Paul Singer’s Elliott Management Corp the Mr. Buffet has always a plan B in the investment sector.

In the second quarter, Berkshire has gained near about $4.26 billion which is 15% down in comparison with the last year performance. However, in other sectors, Berkshire made a significant improvement in its gain which clearly mitigated this 15% deficit in the net income. Mr.Buffet is more concern about his investment over return and to him finding new scope in the investing world will be extremely daunting in the recent global economic crisis. According to Edward Jones, the dramatic increase in the cash pile of Mr. Buffet clearly exhibits that he is waiting for the right opportunity in put his money into the investment world. Shanahan has already pointed out that in near future the global investors will be shocked to see diversity in Mr. Buffet investment to grow his vast investment empire. However, there might be an imminent correction in Berkshire spending and this will slow down the growth of the business.
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