The legendary Oracle of Omaha Warren Buffett has done it again. Months before US markets began their February tumble from record highs, the bn’aire’s industrial conglomerate Berkshire Hathaway was already divesting from equities, offloading a net USD 134 bn in stocks, including two thirds of its substantial USD 174 bn Apple stake. By March, while the S&P 500 and Apple had both retreated 9%, Berkshire flourished with a 10% gain and USD 334 bn in liquid assets.

This foresight proved valuable during Trump’s tariff-induced market volatility. When the S&P 500 fell 5% and Apple dropped 9%, Berkshire only experienced a 1.5% loss. While the market remains 11% below its peak, Berkshire has gained 7%, approaching its record USD 1.2 tn market capitalization.

Should corporate leaders follow Buffett’s “cashflow is king” strategy? Signs point to not adopting this approach wholesale. Not all currency-rich enterprises have enjoyed Berkshire’s resilience. Amazon and Google parent Alphabet — with approximately USD 100 bn each in liquid resources — both remain down about 15% since market highs.

Other industries tell a similar story: Toyota and TSMC’s monetary buffers — roughly USD 75 bn each — couldn’t shield them from significant valuation declines since January. Meanwhile, CITIC, a Hong Kong-listed Berkshire aspirant, boasts USD 249 bn in undeployed capital, yet maintains a disproportionately modest USD 31 bn market capitalization. Though this could be partly explained by its partially bank-like balance sheet structure.

Number crunching reveals virtually no correlation between a company’s treasury position and its share price performance. Even examining currency-to-revenue ratios, Berkshire ranks just 56th among major non-financial public companies worldwide.

Contrary to Buffett’s approach, many of today’s most successful companies operate with a completely different approach of (comparatively) modest liquidity. Nvidia keeps liquid assets at just 33% of its revenues, while Novo Nordisk maintains an even leaner 9% — Berkshire is closer to 75%. Yet both companies put their capital to work, generating returns of 71% and 46% respectively.

While Scrooge McDuck-levels of liquidity seem alluring, a major drawback is increasingly apparent — opportunity cost. Berkshire's monetary reserves have grown 2.5-fold over five years, during which its returns on capital have actually declined. Other liquidity-rich companies show similar patterns.

As markets navigate today’s unpredictable landscape, corporate leaders face a challenging balancing act: keep substantial capital on hand as a buffer against potential downturns, or deploy those resources to fuel innovation and growth. The smart approach isn’t necessarily copying Buffett’s playbook wholesale, but thoughtfully considering company-specific circumstances, industry dynamics, and strategic objectives.

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