Warren Buffett has generated terrific, market-beating returns for years by focusing on investing in quality businesses at fair prices.
That means he’s often left sitting on the sidelines when there aren’t any compelling buying opportunities
While he’s no longer the CEO of Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB), the company’s cash pile has grown significantly over the years and remains high under Buffett’s successor, Greg Abel. Sitting on cash isn’t a huge concern for Buffett. Investing, after all, involves a long-term approach and mindset.
There’s something he fears much more than letting cash sit idle and not investing it in stocks. And it’s something investors should fear as well. Buffett’s more concerned about making a mistake In an old letter to Berkshire’s shareholders back in 2003, Buffett explained why he’s OK with letting cash sit idle: he’s more concerned about making a more costly mistake.