Warren Buffett, known for his keen eye for undervalued stocks and businesses, emphasizes the importance of maintaining liquidity. While he actively seeks investment opportunities, he ensures that Berkshire Hathaway always has sufficient reserves.
At the 2012 Berkshire Hathaway Annual Meeting, Buffett highlighted this principle, stating, “We know we don’t want to go broke. I mean, we start with that. And we know you can’t go broke if you’ve got a fair amount of liquid reserves around and you don’t have any near-term debts and so on.”
This strategy underscores the value of financial stability. By keeping adequate cash reserves and avoiding excessive short-term debt, Buffett ensures his company remains financially secure, even in uncertain times. His approach serves as a reminder that long-term success in investing isn’t just about making the right purchases—it’s also about maintaining the flexibility to weather economic downturns.
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© 2025 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.