Source: Zhitong Finance
On Thursday, “stock god” Buffett said he's not worried about Fitch lowering the US government's credit rating, his company$Berkshire Hathaway-A (BRK.A.US)$/$Berkshire Hathaway-B (BRK.B.US)$We are still buying $10 billion of US Treasury bills every week.
In an interview with the media, Buffett said, “There are some things people shouldn't worry about. This is one of them.” Although he also added that Fitch made some valid points. Buffett is not concerned about the dollar either. “We all know that the US dollar is the world's reserve currency,” he said.
Buffett said, “We bought 10 billion US dollars of treasury bills last Monday, and we also bought 10 billion US dollars this Monday.” Berkshire buys when the government auctions 3-month and 6-month treasury bills every week.
Buffett also said, “The only question next Monday is whether we will buy 10 billion three-month or six-month treasury bills.” When his company's treasury bills expire, they buy new treasury bills at weekly auctions and keep holding them.
Berkshire Hathaway is one of the largest holders of US treasury bills because Buffett likes their high level of security and liquidity. As of March 31, Buffett had invested most of Berkshire's $130 billion in cash and equivalents, or $104 billion, into treasury bills.
Although 92-year-old Buffett likes treasury bills and doesn't like long-term US treasury bonds, Berkshire adopted a barbell strategy for his investment portfolio, that is, holding cash and equivalents and stocks. The total value of Berkshire's stock portfolio is around $375 billion, of which nearly half$Apple (AAPL.US)$medium. As of March 31, the company held only $23 billion in bonds.
On Tuesday, Fitch downgraded the US government's credit rating from AAA to AA+. The rating agency pointed out that US governance standards have been steadily deteriorating over the past 20 years, including on fiscal and debt issues, even though the two parties reached an agreement in June this year to decide to suspend the debt ceiling until January 2025. The repeated political impasse on the debt ceiling and last-minute solutions have weakened the confidence of the outside world in managing its finances.
In 2011, S&P also downgraded America's sovereign rating. Of the top three rating agencies, only Moody's maintained the highest credit rating for the US. In fact, since 1917, despite risk warnings about America's economic prospects, Moody's has not changed its top rating for the US. Notably, Berkshire is a major shareholder of Moody's Ratings. According to the latest data, Berkshire holds 13.44% of Moody's shares.
Editor/jayden