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The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", BreckHutHigh asked the members: "What about the long road trips with kids?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: Mark   😊 😞
Number: of 21939 
Subject: Re: OT: T-bills
Date: 02/22/25 10:45 PM
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Berkshire head office doesn't buy money market funds, they buy T-bills. They like to be sure.

Not just "sure".

1. You own your own T-bills so you can decide on your own immediately what to do with them.
2. Why pay someone else 0.03% to buy T-bills for you? 0.03% of $334B is about $100 million. Why give $100M away when you can keep it for yourself? Even if they were to pay only 0.01%, it's still over $30M!
3. It's easier to use your own T-bills as margin. If Berkshire wants to make a huge, let's say $100B purchase, they can do it easily. There's more than enough margin to do so and then eliminate it as the T-bills come due. The margin allowed for money market fund is different.
4. If you want to own T-bills, buy T-bills. Because money market funds own mostly T-bills but not all T-bills, they also own various other commercial paper, swaps, and other weird things that goose yields somewhat, sometimes.
5. When you have $334 billion in cash, you are bound to overwhelm any money market fund, so if you do indeed suddenly need $100B for a big purchase, you will surely cause some disruption.
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This community has written 21,448 posts about Berkshire Hathaway. The article-length ones it recommended most:
BRK: Why Not XOM? · 62 recs · 2024
Second quarter comments · 60 recs · 2023
Berkshire's Profit Contributors · 57 recs · 2023
Summary of 2Q 2026 · 54 recs · 2026
3Q Summary · 53 recs · 2024
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