Warren Buffett's cash pile reaches record $325 billion

The latest Bank of America fund manager survey showing investor cash holdings at a 15-year low. Compare that to Warren Buffett, who's sitting on a record cash pile at over $325 billion. While he's put some of that dry powder to use in the fourth quarter, he's also trimmed and exited several positions. Joining us now on this, we've got Lee Mumson, President and Chief Investment Officer at Portfolio Wealth Advisors. Lee, great to speak with you. Buffett's cash holdings in particular seem to get a lot of attention because folks are concerned that it is a bearish signal for the market if Buffett is not invested in U.S. stocks. What can you tell us about that? Well, a lot of this stems from a huge sale of Apple that he did last year, and he just has a bunch of cash and he's slow to get it to use. They have been on a buying spree with Occidental, and I think that that's something that is notable. They bought a ton in December. They bought a ton this year. And so I think it's about what qualities that Buffett likes, and he's looking for things that have strong cash flow, assets that aren't going to go anywhere. And I think he's got a real love for Occidental because they have these quality properties, or let's just say these assets in the Permian Basin, and they're paying down debt. So I think that what it really says is that this is a momentum market. It's hard to find good value right now. And I think that Buffett is waiting his time, but I don't think we should, you know, have this. I don't think we should think just because he has a lot of cash, it means the market is ready to fall per se. I mean, look at Occidental. In the past, you know, since I think last April, it's down 30 percent. And so there are things in the market that are down, beaten up, left for dead that you can buy here. Lee, what do you think this tells us about Buffett's and his team's just longer term strategy, just in terms of the opportunity that they have identified within Occidental? They like buying beaten down stocks. They like seeing some of the companies that they could potentially, that could potentially turn around. So what does this signal maybe about that strategy and what that looks like for what's ahead? Well, you know, I think there's some sense that, you know, there's always going to be Buffett haters. There's always going to be people who think that what that team does is too slow moving, that there's not a lot of, you know, there's not enough opportunity set. I disagree. I think it's just a style. You know, we're in a market for years now that has been based on big tech companies promising ever larger growth and in revenues. But I think that when you look at the type of trades that he's doing and the type of positions that they're putting on, it really goes, I mean, I don't think anything's changed in 10, 15, 20 years or even beyond that, what their strategy is. I think that you can look at what they're buying and it's just a completely different philosophy of the market than is Facebook going to hit their earnings and are they going to have an AI agent by the end of the year? To focus specifically on Occidental though, it's interesting because, and you mentioned this in your note, it's not a company that is hedged on oil prices and of course is at risk of the potential depression in oil prices, which is something that we have been seeing. How risky does that make this name, particularly given both the geopolitical backdrop abroad and then also here at home? Risk. You know, I think Buffett said risk is not knowing what you're doing. And I think that the Occidental is a good example of this. I was long this stock several years back when it was in the high 50s, early 60s, it went sideways for a while. It wasn't making money. And I had to go and get busy. You know, now you come back, you look around, you think, hey, this thing's down 30 percent from where, you know, I last traded it. We're going to see some earnings today. We're going to see how bad the cash flow is. I think that you have to take a longer term view. You know, do you think that assets in the Permian Basin are going to be more or less valuable three, five years from now? Do you think that upstream, the exploration with Trump's America right now, do you think that's going to be a headwind for Occidental? I think so. You know, Occidental, you know, the narrative is confusing. They've got Midstream. They've got the chemical company. They've got the carbon capture. And I think Wall Street doesn't like not having a pure play. But I think that if you like assets, if you want to do an asset play and you believe that Buffett really believes so much in Occidental and their management team, I think it's worth looking at. But I would rather wait for some bad earnings. I'd rather wait for Wall Street to completely leave this thing for dead. It could get worse because their cash flow is going down right at a time that they need to be paying down debt. So I'd actually like to take a page from Buffett's thing and rejoice when stock prices are down. I just think Occidental has a lot of risk this year. You know, we've got a president who's trying to lower energy prices. But on the other side, he's going to loosen up regulation. And the strategy that Occidental is doing right now, it's great. Just remember, you're not going to get a clean narrative. It's never going to be a hot momentum stock. And if it's going to work, it's going to be a sleeper hit. What about some of the other moves that we've seen Berkshire make? Consolation Brands, that's a new holding here, adding to Domino's, adding to Poolcorp, adding to SiriusXM. What does that tell you? Well, I think he's just knee deep in the value trade. I mean, he just does not care about some of the broader things that are happening in AI or what have you. You know, they're looking at staples. They're looking at things that people use every day. I'm fascinated by the satellite radio. You know, I'm on satellite radio every day. It's not something that's going to go away. I've got, you know, a ton of cars. I'm always, like, upset, like, someday I'm going to, like, call them and say, stop charging for my teenage daughter's car for ten bucks a month. But you know what? He knows about inertia. He knows about the U.S. consumer. And so I think that you can look at that and I think he thinks that the U.S. consumer is just fine. They're going to keep paying for staples. And a moat is a moat. I just think a lot of what he's doing is unpopular right now. And until we see some big disappointments in the Mag 7, you're not going to see a lot All right, Lee. Always great to talk to you. Thanks so much for taking the time to join us here this morning. Thank you.