Berkshire had a record $137 billion in cash and equivalent instruments on its balance sheet at the end of the first quarter, up from about $127 billion at the end of 2019. They bought $1.8 billion in stocks and $1.7 billion repurchasing Berkshire shares.

Staying in cash means having money to support the current Berkshire portfolio of companies and having money to buy clear opportunities later. The Federal Reserve is propping up the corporate debt markets. There are companies going bankrupt even with the Fed support. When the Federal Reserve lessens its support of corporate debt markets then many more zombie companies will fail. There will be valuable assets available at discounted prices when those companies fail.

Buffett is worried about the extreme consequences of the Federal Reserve buying corporate debt. He said the Fed has done a good job responding to the financial crisis caused by COVID-19 and the pandemic shutdown. Buffett is concerned about the longer-term impacts.