The $189 Billion Question for Greg Abel at the Next Annual Shareholders Meeting. Why?
Warren Buffett has been telling ordinary investors the same thing for thirty years. Buy a low-cost S&P 500 index fund. Hold it. Don’t touch it. He said it at annual meetings. He said it in shareholder letters. He said it so often that it became the one piece of financial wisdom that transcended the investing world and entered the general culture, right up there with “don’t spend more than you earn” and “compound interest is the eighth wonder of the world.”
He even put it in his will. The instructions for the trust that will manage cash for his wife after his death are explicit: 90% in a very low-cost S&P 500 index fund. 10% in short-term government bonds. He believes it so strongly that it’s his final act of financial stewardship for his own family.
There’s just one problem.
He didn’t do it himself.
The math nobody has run
While Buffett was dispensing this advice, Berkshire Hathaway was accumulating the largest corporate cash hoard in American business history. The pile started at roughly $72 billion in 2015. It grew steadily — through bull markets, through corrections, through a pandemic — and by the end of 2025 it had reached $373 billion. As of this writing it sits at nearly $400 billion, parked almost entirely in short-term U.S. Treasury bills.
The cash wasn’t idle. T-bills earn something — near zero from 2015 to 2021, then a decent 4-5% as rates rose. Buffett has pointed to the interest income with some satisfaction.
But here’s what nobody seems to have calculated precisely: what was the opportunity cost of following a different strategy than the one he recommended?
The math, year by year: in 2017 the S&P returned 21.8% while T-bills yielded 0.9% — Berkshire missed $18 billion. In 2019 the index returned 31.5% against a 2.3% T-bill rate — $33 billion gone. In 2020, 18.4% vs 0.4% — $23 billion. In 2021 — the S&P up 28.7% with T-bills yielding essentially nothing — $40 billion. In 2023, 26.3% vs 5.1% — $27 billion. In 2024, 25% vs 5.1% — $33 billion. In 2025, with $334 billion sitting in T-bills earning 4.5% while the index returned 17.9%, another $45 billion gone. Cash won in exactly two years out of ten — 2018 and 2022, when the market dropped — saving roughly $38 billion combined. The net over a decade: $189 billion.
Total opportunity cost: approximately $189 billion.
That’s the gap between what the cash earned in T-bills and what it would have earned if Buffett had followed his own advice. One hundred and eighty-nine billion dollars. Over ten years.
That figure is actually conservative. It treats each year independently rather than compounding the forgone gains forward. If the missed returns from each year had themselves been invested and grown at S&P rates through 2025 — as they would have been in any real portfolio — the compounded opportunity cost rises to approximately $309 billion. The 2019 miss alone, a simple $33 billion at the time, compounds to $76 billion by 2025. Early misses had nearly a decade to grow.
Yes, it was one of the strongest decades for the S&P 500 in history. The opportunity cost is what it is regardless.
Two good years don’t close the gap
The honest reading of this table is that cash beat the market in two out of ten years — 2018 and 2022, when the S&P dropped. In those two years alone the cash position saved Berkshire roughly $38 billion compared to being fully invested.
That’s real. It’s not nothing.
But it still leaves a net opportunity cost of $189 billion. And it raises an uncomfortable question: if the advice is right — if the index beats most alternatives over time, as Buffett himself proved in his famous million-dollar bet against a basket of hedge funds — then it was also right for Berkshire’s cash pile. The same logic that should have kept his wife’s trust in Vanguard should have pushed that $72 billion into the index in 2015.
It didn’t. And the meter kept running.
The scoreboard on the stocks themselves
You might assume that while the cash pile sat idle, at least the money Berkshire did invest outperformed the index. That Buffett’s legendary stock-picking eye was still beating the market, even if the cash was dragging the overall number down.
The data doesn’t support that assumption.
From 2015 to 2025, the S&P 500 returned 304% compared to Berkshire Hathaway’s 234% — the whole company, operating businesses, insurance float, equity portfolio, everything, trailing the index by 70 percentage points over the exact decade in question. Over ten years BRK-B returned 12.6% per year vs 15.2% per year for the S&P 500.
The head-to-head scorecard is 5-5 on annual wins, which sounds competitive until you look at the margin of victory. In 2019 the S&P beat Berkshire by 20 percentage points. In 2020 by 16 points. In 2023 by 11 points. Berkshire’s biggest single-year win was 2022 at 21 points — one genuine bright spot surrounded by years of meaningful underperformance.
The individual stock picks didn’t help. Kraft Heinz was a multibillion-dollar write-down. The airlines were bought and sold at the bottom during COVID at a loss. TSMC was purchased and flipped within a single quarter. Paramount was a near-total wipeout. Apple was a genuine winner — one enormous right call that papered over a long list of expensive wrong ones.
Zoom out to 20 years and the outperformance is 0.6% per year — barely ahead, before adjusting for the leverage advantage from insurance float that ordinary investors don’t have. Strip out the float and the edge disappears entirely.
The legend was built between 1965 and 2000. The last quarter century has been roughly a wash with the index. The last decade has been a loss.
The great tech compounders of the last two decades — Google, Amazon, Meta, NVIDIA — were there to be bought. Apple was the one that fit his framework. He came to it late and left it early.
A footnote on Apple, his one undeniable winner: Berkshire sold approximately 600 million shares throughout 2024 at an average price around $185. Apple ended the year at $254 — leaving roughly $40 billion on the table from the single best investment in the portfolio’s recent history. On the one stock pick that genuinely worked, he sold two-thirds of it early. On the cash pile that didn’t work, he held every dollar. The instincts ran exactly backwards.
The Oracle is averaging the market
Warren Buffett is treated as though he has a direct line to financial truth. The annual meeting draws forty thousand pilgrims to Omaha. CNBC breaks into programming when his 13-F drops. Every aphorism gets framed and hung on a wall. The Oracle of Omaha — a title that implies not just skill but foresight, wisdom, something approaching prophecy.
The last decade of data suggests a more ordinary reality. The stock has returned 12.6% per year versus the index’s 15.2%. The cash pile underperformed by $189 billion on a simple basis, $309 billion compounded. The individual stock picks — excluding Apple — read more like a cautionary tale than a masterclass. The twenty-year edge over the S&P 500, once adjusted for leverage, disappears.
That’s not failure. It’s average. Which would be fine — average is respectable — except the legend is built on something more than average. The sixty-year record is real and extraordinary. But sixty years of genius doesn’t mean the last ten were genius too. At some point the data is the data.
That’s not a takedown of Warren Buffett. The sixty-year record stands. The advice is still good. I believe it — the bulk of my own money sits in S&P 500 index funds, exactly where he told me to put it.
The irony is that he told me to do what he stopped doing himself.
He paid somewhere between $189 and $309 billion for the right to wait.
Whether that was the right price is a question only time will answer. Someone should ask Greg Abel. The Berkshire annual meeting is in Omaha every May. The microphone is open to any shareholder.
The question is simple.
Why?