Warren Buffett's been waiting years for a crash like this — but he might not be buying just yet

• Warren Buffett socked away $321 billion while waiting for stocks to crash like they did Thursday.
• The legendary investor specializes in buying cut-price assets during periods of market panic.
• Buffett gurus told BI the billionaire may wait for lower prices or a clearer outlook before buying.

Warren Buffett famously says to "be greedy when others are fearful" and "when it rains gold, put out the bucket, not the thimble." The legendary bargain hunter has been waiting years for stocks to crash like they did on Thursday — but he might not be buying yet.

President Donald Trump's declaration of a near-universal 10% tariff on foreign goods, and even steeper import taxes for the "worst offenders" such as China, vaporized $2.4 trillion or nearly a Nvidia's worth of market value from the S&P 500 on Thursday. The benchmark stock index tumbled further on Friday.

Some of Buffett's favorite stocks got spanked with Apple, American Express, Bank of America, and Occidental Petroleum all tumbling more than 9%.

Buffett didn't immediately respond to a request for comment.

The downturn is likely to hearten the Berkshire Hathaway CEO, given he's a value investor who seeks to buy businesses at a discount to their worth. He's also known to capitalize on crises, for example when he deployed a full $26 billion across five deals between 2008 and 2009.

Buffett wrote in his 2017 shareholder letter that sharp sell-offs can create "extraordinary opportunities" for investors who heed poet Rudyard Kipling's words to "keep your head when all about you are losing theirs."

However, surging valuations have priced him out of buying stocks, acquiring businesses, and even repurchasing his own company's stock in recent years.

Buffett, 94, has also offloaded a net $158 billion of stocks over the past two calendar years. Berkshire's cash pile has roughly tripled from under $110 billion in September 2022 to $321 billion at the end of 2024 — that's bigger than Coca-Cola's market value.

Armed with an overflowing war chest, Buffett appears well-placed to wade into the market rout and scoop up stocks on the cheap. The internet certainly agrees — social media is rife with comments and memes about Buffett sitting pretty while markets are in chaos.

Wall Street has also rewarded Buffett's cash hoarding: Berkshire's stock price is up about 15% this year, trouncing the S&P's near-11% decline.

The share surge has added $23 billion to Buffett's personal fortune and vaulted him past the likes of LVMH's Bernard Arnault and Oracle's Larry Ellison into fourth place on the Bloomberg Billionaires Index.

Yet the famously patient and disciplined investor might wait longer before pouncing.

"When prices fall, it certainly encourages Buffett to buy unless he views new permanent damage greater than the price discount," Steven Check told Business Insider. He oversees $2 billion of assets as the CEO of Check Capital Management and has attended every in-person Berkshire annual meeting since 1996.

Stocks may be cheaper than before, but Check said Buffett will likely "require a much larger drop to do significant buying."

Waiting game

Buffett's followers will likely have to wait until Berkshire's meeting in May or its second-quarter portfolio update in August to learn whether the investor topped up his holdings this week.

Steve Hanke, a professor of applied economics at Johns Hopkins University who's been teaching Buffett-style valuation to students for decades, told BI he's "watching his next move with the most careful and anxious attention" as it will "tell us a great deal about where he thinks the economy is going."

"If he plunges into the market and starts buying, it will signal that he believes the Trump tariffs were nothing more than a minor economic annoyance that created wonderful buying opportunities," he said. Hanke is a former economic advisor to President Ronald Reagan and was the president of Toronto Trust Argentina when it was the world's best-performing mutual fund in 1995.

If Buffett holds off, Hanke said it would suggest he's keeping in mind the Smoot-Hawley tariffs of March 1930, which "broke the back of the stock market, and helped to plunge the world into the Great Depression."

Hanke's "tentative guess" is that Buffett's knowledge of economic history will lead him to "remain on the sidelines, at least for a while" until the scope of what he's dealing with grows clearer.

If the frantic selling in markets continues, Buffett's moment might come sooner rather than later.