Buffett says the current decline in US stocks is “not worth mentioning.” Holding 350 billion yuan in cash, why hasn’t he stepped in yet?

Ask AI · What are the key features of a true buying opportunity in Warren Buffett’s view?

Recently, Buffett made a statement that sparked quite a discussion. He said that the recent market decline is not worth mentioning compared to historically genuine buying opportunities. Currently, market valuations still lack sufficient attractiveness, so he has no immediate plans to deploy Berkshire Hathaway’s massive cash reserves.

At first glance, this sounds like a prediction that the market will fall further. But upon closer examination, he’s actually saying something else: the current decline he sees isn’t yet severe enough to make him feel “not buying would be a crime.”

To understand this judgment, we need to first consider a question — what exactly do truly good buying opportunities in history look like?

Looking back at the moments Buffett himself experienced, such as after the 1974 crash, the 1987 Black Monday, the dot-com bubble burst in 2000, and the 2008 financial crisis, genuine opportunities were never just “a 20% drop” correction. They usually have several distinctive features.

The first feature is extreme panic. Not just media-driven fear, but real, fund-level panic — forced liquidation of leveraged positions, massive redemptions causing forced sales, even the best companies’ stocks being indiscriminately hammered. At such times, the divergence between price and intrinsic value reaches absurd levels. After Black Monday in 1987, Coca-Cola’s stock once fell to a level Buffett considered incredibly cheap; in 2008, when Goldman Sachs needed Buffett’s investment, the entire financial system was teetering on the edge. In these moments, the market isn’t just “declining,” it’s “failing.”

The second feature is a systemic reset of valuation frameworks. Usually, you think “good companies aren’t cheap,” but at the true bottom, those with strong moats are trading at prices that even private capital finds attractive — meaning, if you had enough money to buy the entire company, its annual return would far exceed government bond yields. In 2008, Buffett invested in Goldman Sachs and General Electric with terms including preferred stocks and warrants — not typical retail investor deals, but those deals were possible precisely because, outside of him, no one dared to put in money.

The third feature is the “endurance” over time. Genuine opportunities often don’t appear at the exact lowest point. The bottom is a zone, not a single number. After buying, prices might continue to fall, making you doubt your judgment. In September 2008, Buffett bought BYD, and in October, the market continued to plunge — but for him, that meant the opportunity was still ongoing.

Comparing these features to today’s market, the decline in US stocks this year was triggered by the sudden escalation of Middle East tensions, with US and Israel’s military actions against Iran pushing oil prices sharply higher — Brent crude once surged over 50%, directly impacting global energy supplies. Meanwhile, the cooling of the AI hype also pressured previously high-flying tech stocks. This geopolitical conflict disrupted the market’s expectations of Fed rate cuts, and inflation pressures re-emerged. There is indeed panic, but it’s not yet systemic, stampede-like, where even top-tier assets are indiscriminately sold off. Valuations are cheaper than their highs, but in the grand scheme of history, they haven’t reached the “buy at any cost” extreme cheapness. In other words, this decline is still just a “price correction caused by bad news,” not a crisis where the market loses its ability to price assets.

Therefore, Buffett’s decision not to deploy cash isn’t because he predicts further declines, but because he knows the real opportunity hasn’t arrived yet. His over $350 billion cash reserve isn’t for catching the bottom; it’s for when the market throws away good companies like cigarette butts, and he can scoop them up in one go.

But here’s an often-overlooked point: Buffett’s statement that now isn’t the time to use cash doesn’t mean he has no stock positions. Berkshire Hathaway still holds a large stock portfolio; he simply isn’t adding significantly to it. For true value investors, normal market fluctuations are never a reason to buy or sell.

This is precisely the investment philosophy Buffett repeatedly emphasizes but is often overlooked: Don’t waste time trying to predict short-term ups and downs; spend your time understanding how much a business is really worth. In a recent interview, he said something very worth pondering — “If investors buy a stock and then sit on it for 50 years, and if they can find a few such stocks, they will do very well. The American capitalist system is efficient, and fighting against the market makers is futile.” The keyword here is “50 years.” When your time horizon is long enough, short-term fluctuations become background noise, not decision criteria.

Buffett also pointed out that many investors’ problems stem from “not giving their investments enough time.” That statement is polite but straightforward — most people aren’t investing; they’re gambling. They replace long-term judgment with short-term predictions, and value anchors with emotional swings. True value investors aren’t about never making mistakes; they’re about not making mistakes because of market volatility. You hold a company because its business can sustainably create value, not because you predict next week’s stock price will rise.

So, returning to Buffett’s words, what is he really saying? He’s distinguishing between two types of decisions: “Use cash reserves to seize extreme opportunities,” and “Hold good companies at reasonable valuations.” The former requires a very high threshold, involving systemic market failure; the latter is a continuous process — as long as the price is reasonable and the business quality is solid, any time is a good entry point. An investor with a long-term position that’s insufficient can buy now — as long as they understand the business and are prepared to hold for the long haul. Buffett himself does this; Berkshire’s stock holdings remain quite high, just with a trigger finger kept only for times of genuine panic.

Not predicting the market, and not being led by it, is the real meaning behind Buffett’s statement. When he says “not worth mentioning,” he’s not predicting short-term moves or urging you to stay on the sidelines. Instead, he’s telling you: Don’t mistake normal market fluctuations for once-in-a-lifetime opportunities, and don’t rush to deploy cash just because you have it. True value investing requires both the courage to go all-in during extreme times and the patience to hold steady during calm periods. Whether now is the time to buy or wait depends on what kind of investor you are — if you’re looking for that “once-in-a-lifetime” perfect entry point, then it’s not here yet; but if you want to buy a good company at a reasonable price and hold long-term, it’s never too late.

Author’s note: Personal opinion, for reference only.