Sitting on cash is tough, it may have cost Warren Buffett a loss of $60 billion: Helios' Samir Arora writes

Samir Arora asked cheekily what such an investor would pray for--for the market to rise or for it to fall

Veteran investor Samir Arora posted about the difficulty in sitting on cash and illustrated this with the example of the billions of dollars Warren Buffett himself has lost because of this investing decision.

Helios' fund manager and founder estimated that the Oracle of Omaha has suffered a loss of $60 billion from not investing in the US markets' current run and that Buffett will need the market to fall 20 percent for this trade to break even or fall 30 percent to add real value from it.

Helios' global fund is invested in Berkshire A and B shares.

Arora posted on platform X, "WB (Buffett) is sitting on US$ 280 b of cash. Not sure exactly but let us say that before his recent Apple sale and BAC sale he was, big picture, sitting on USD 150 billion range cash for last 2 years +.

"In last 2 yrs, US market is up approx 50% (Sep 22 to Sep 24). He therefore lost 40% (after making 5% p.a. from investing in treasuries etc) on US$ 150 billion, ie. US$ 60 billion due to not investing in market.

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"Now he has US$ 280 billion cash. So to recover this opportunity loss of US$ 60 billion, market must fall 20% plus for this trade to break even. To add real value the market must fall some 30% from here and then he would have added some marginal alpha on the trade. You decide whether it is worth it."

Arora wrote that the second problem with sitting on cash is how confusing it would be for an investor or any divine power he/she prays to.

Arora asked, "What do you pray for every morning."

He added, "That markets go down because u have some cash or that the markets go up because u have major investments in the market. Can get very confusing for both you and God."