Buffett’s $277 Billion Cash Surge: Elon Musk Slams Fed for High Interest Rates

Berkshire Hathaway, owned by Warren Buffett, has made a notable decision by reducing its stake in Apple by approximately 50%. The conglomerate based in Omaha revealed that its Apple holdings were valued at $84.2 billion at the end of the second quarter. Thanks to the sale of Apple shares, Buffett’s cash reserves have soared to a record $277 billion.

Key Point:

• The Fed needs to cut interest rates. They are foolish for not doing so. Quote by Musk
• Berkshire Hathaway's net income for the second quarter fell compared to the previous year, primarily due to reduced investment earnings, even though operational income saw an increase
  

Courtesy Source:www.cnbcindonesia.com

Courtesy Photo Source: Mark Hirschey

Elon Musk, CEO of Tesla and SpaceX, also weighed in on Buffett's cash reserves. In a post on X (formerly Twitter), a user jokingly suggested that Buffett could make a massive investment with this cash reserve and acquire major companies such as Netflix, Salesforce, Toyota, Adobe, and Hermes.

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In response, Musk commented, "He is clearly expecting some form of correction or cannot find better investments than government bonds." He further criticized the U.S. Federal Reserve for not lowering interest rates, suggesting that current rates are too high.

"The Fed needs to cut interest rates. They are foolish for not doing so," Musk said on his personal X account, as reported on Wednesday (August 7, 2024).

Berkshire Hathaway's net income for the second quarter declined year-over-year due to a drop in investment gains, despite an increase in operational income. The company continued to reduce its stake in Apple during this period.

For the second quarter, net income decreased by 15.50% year-over-year, falling from $35.91 billion to $30.35 billion. Conversely, operational income, reflecting revenue from the company’s portfolio entities, increased by 15.48%, reaching $11.60 billion.

Investment portfolio gains saw a significant drop of 27.52%, falling to $18.75 billion.

Meanwhile, Berkshire’s swollen cash reserves have sparked speculation on social media about potential investments, with some Tesla enthusiasts hoping that Buffett might invest in the electric vehicle maker’s stock.