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Journalist Tom Sykes claimed the Duchess of Sussex was a hypocrite for "exposing" Lilibet on Instagram to her more than 4.5 million followers.

Journalist Tom Sykes claimed the Duchess of Sussex was a hypocrite for "exposing" Lilibet on Instagram to her more than 4.5 million followers.

Carl's Jr. — once a dominant Southern California burger chain — is facing major financial and operational strain.

Buffett Cash Hoard: Why $397 Billion Sits On The Sidelines

Authored by Lance Roberts via RealInvestmentAdvice.com,

$397 billion. That’s how much “Buffett cash” now sits on Berkshire Hathaway’s balance sheet after Greg Abel’s first quarter as CEO. Warren Buffett left $373 billion behind when he stepped down at the end of 2025. Three months later, after Abel’s debut earnings report on Saturday, the hoard had grown by another $24 billion. The figure is bigger than the GDP of Hong Kong or Norway. It exceeds the market value of every American corporation except a tiny handful of mega-cap names. And it earned roughly four to five percent in Treasury bills while the S&P 500 ripped through three of its best consecutive years in modern history.

That Buffett cash hoard has also created a lot of speculation, innuendo, and assumptions, which is what I want to walk through in today’s discussion. Primarily, what that cash hoard actually represents, the popular theories explaining it, and what it really costs shareholders to hold.

The headline cash hoard number is striking on its own. Berkshire Hathaway ended Q1 2026 with a record $397.4 billion in cash and short-term Treasury bills, surpassing the prior $381.7 billion peak set in Q3 2025 and adding another $24 billion to what Buffett left behind. Of that, roughly $52 billion sits in plain cash and equivalents, with the bulk parked in Treasury bills earning short-term yields. By the time Abel released his first quarterly print on May 2, Berkshire was one of the largest holders of US Treasury debt in the world.

This wasn’t an accident. Between 2022 and 2024, Berkshire sold a net $172.93 billion in equities, with $134.1 billion of that coming in 2024 alone. Buffett trimmed his Apple position from nearly 50% of the equity portfolio down to roughly 22%. He cut Bank of America by more than half. Berkshire stopped repurchasing its own shares for nearly two years, sitting out twenty-one consecutive months as the stock traded above what Buffett considered its intrinsic value. Buybacks finally resumed under Abel on March 4, 2026, but only at $234 million in Q1, a token figure against a balance sheet of this size. In Q1 alone, Berkshire sold another $24.1 billion in equities against $16 billion in purchases, a net $8.1 billion reduction that pushed the cash pile to its new record.

The selling was deliberate, sustained, and almost entirely contrary to the prevailing market mood. While CNBC anchors debated whether the AI revolution was just getting started, the world’s most patient investor was quietly heading for the exits. Abel, in his first quarter, did exactly the same thing.

The History Of Buffett’s Cash Hoard

Berkshire’s cash position has always been countercyclical. When markets get cheap, the pile shrinks. When markets get expensive, it grows. That pattern has held for decades, but the magnitude in this cycle is unlike anything we’ve seen before.

In 2014, Berkshire’s cash and Treasury position hovered around $63 billion. By 2019, it had grown to $128 billion as bull market valuations stretched higher. The pandemic crash in early 2020 drew Buffett out for a brief window, when he deployed capital into Occidental Petroleum and Chevron. Those deployments barely dented the larger trend, and by the end of 2022, Buffett’s cash hoard had only modestly receded to roughly $109 billion despite the bear market that year.

Then came 2023 and 2024. As the S&P 500 ripped through gains of roughly 26 percent and 25 percent in consecutive years, Buffett didn’t chase. He sold. The cash hoard nearly doubled in 2024 alone, climbing from $168 billion to over $325 billion. By Q3 2025, it crested at $381.7 billion before a slight deployment trimmed it to $373.3 billion at year-end. Then in Abel’s first quarter at the helm, the hoard climbed to a fresh record of $397.4 billion as Berkshire kept selling, kept compounding T-bill yield, and continued to find few large-scale opportunities at acceptable prices.

The shape of that chart isn’t a coincidence. It’s the visual representation of a value investor’s discipline meeting a market that increasingly didn’t offer value. And the bar that matters most now is the one on the right: the discipline didn’t end with Buffett’s retirement.

Theory Versus Reality

The financial press has spent the past two years generating theories about Buffett’s cash position, and Saturday’s record Q1 print has reignited every one of them. Some are reasonable. Most miss the structural drivers entirely. Let’s separate the popular narratives from the actual mechanics.

Theory: Buffett Was Calling A Crash

This is the most viral interpretation. The Oracle of Omaha sees a bubble. He’s positioning Berkshire to scoop up bargains when the market collapses. The Buffett Indicator, which compares total US market capitalization to GDP, reached its highest level in history at the end of Q1 2026.

The math behind the indicator is straightforward. Take the total market value of all US publicly traded equities, divide by US nominal GDP, and you get a single ratio that Buffett himself called in a 2001 Fortune interview “probably the best single measure of where valuations stand at any given moment.” With Q1 2026 nominal GDP at $31.86 trillion (BEA advance estimate, released April 30, 2026) and total market capitalization near record highs, the ratio has surpassed every prior peak in the data series.

Two readings matter at this moment. The Federal Reserve’s broader corporate equities measure, divided by GDP, is roughly 232%, the highest level on record. The narrower Wilshire 5000 measure divided by GDP comes in at approximately 215%. Both versions are in record territory. Both are roughly two standard deviations above their long-term trend lines.

There’s some truth in the crash-call interpretation. Buffett has openly cited valuation discipline in his shareholder letters, and Abel echoed that language Saturday when he told shareholders Berkshire “can move it from insurance to non-insurance, into equities, or if we so choose, to hold it in cash.” But framing either of them as a market timer misreads the process. They don’t sell because they predict a crash. They sell because they can no longer find prices that justify the underlying business economics. Those are different statements that happen to look identical from the outside. The indicator above is consistent with the decision to stop buying. It’s not the same as a forecast that the market will fall next quarter.

Theory: Buffett Lost His Edge

The narrative that Buffett, at 95, simply couldn’t keep up with a bull market led by technology gained traction during 2023 and 2024. Berkshire trailed the S&P 500 in both years. Berkshire has now trailed the index by more than 30 percentage points since Buffett signaled his plan to step down last May. The Magnificent Seven were running, AI was the dominant story, and Berkshire’s portfolio looked stodgy by comparison.

However, I’ve heard this critique my entire career. It was wrong every previous time, and I’d argue it’s wrong now. Buffett’s framework is the same one he used in 1969, 1999, and 2007. The framework doesn’t fail. The market environments that cause its short-term underperformance are themselves brief and mean-reverting. And Abel’s decision to keep selling in his first quarter signals the framework isn’t going anywhere.

Reality: Berkshire Is Too Big For Its Own Process

Here’s the part that doesn’t make headlines but matters most. Berkshire’s market cap is now approaching $1 trillion. Buffett has said for years that “there remain only a handful of companies in this country capable of truly moving the needle at Berkshire.” When you need to put $50 billion or more to work in a single position to move the dial on a balance sheet that size, your universe of investable opportunities shrinks dramatically.

Add in the 20% takeover premium that Berkshire would have to pay to acquire any meaningful target, and the math gets brutal. A potential acquisition trading at 22x forward earnings quickly becomes 26x or 27x after the premium. That’s not a value investment, but rather a momentum trade dressed up in a board resolution.

Reality: Treasury Bills Were Paying You To Wait

The single most overlooked factor in this entire conversation is yield. From 2023 through most of 2025, short-term Treasury bills paid roughly 4-5%. That’s nothing. Berkshire generated about $8 billion in interest and other investment income in just the first three quarters of 2024, compared to $4.2 billion in the same period of 2023. Q1 2026 operating earnings just printed at $11.35 billion, up 18% year over year, with insurance underwriting profits up 28%. Net income more than doubled to $10.1 billion. The cash isn’t just sitting there. It’s compounding while it waits.

When cash itself produces a real return, the opportunity cost of waiting collapses. That’s a structural change from the 2010 to 2021 environment, when zero-rate cash was a guaranteed loss relative to any positive-return asset. The hoard wasn’t growing only because Buffett was selling and Abel kept selling; it had been compounding all along.

What The Cash Hoard Cost Shareholders

This is the part of the analysis no one wants to do, honestly. So let’s do it.

If we take the cash position averaged across 2023, 2024, and 2025, roughly $250 billion blended over the three years, and ask what that capital would have earned in the S&P 500 versus what it actually earned in Treasuries, we get a meaningful number. The S&P 500 returned approximately 26% in 2023, 25% in 2024, and 16% in 2025. Compounded against the average cash position, a hypothetical S&P 500 deployment would have produced roughly $155 billion in gains over the three years. The actual Treasury bill earnings on that cash came to about $34 billion. The forgone gain was approximately $125 billion.

That’s a real number. By any reasonable measure, holding that much cash during a sustained bull run costs Berkshire shareholders meaningful upside relative to a hypothetical fully invested alternative. The trailing 12 months tell the same story. Berkshire’s Class A shares have lagged the S&P 500 by a meaningful margin over the past year as the index has continued to grind higher, and Saturday’s earnings reaction was muted despite the operating beat.

Comparing Berkshire to the S&P 500 understates what a strict value framework actually missed during this cycle. The S&P is a blended benchmark. The basket Buffett genuinely sat out was the mega-cap growth complex. The cleanest investable proxy for that basket is the Vanguard Mega Cap Growth ETF (MGK), a fund built around the largest US growth names. It captures the Magnificent Seven and the broader leadership in AI names that drove the bulk of index returns from 2020 forward.

Looking at the ten-year price-return comparison anchors the cost differently. Over the period from May 2016 through April 2026, BRK.B delivered approximately 237% in cumulative price appreciation, while MGK returned roughly 398%. That’s a CAGR gap of about 4.5 percentage points per year, compounded across a full decade.

The chart above isn’t an indictment of Buffett, but rather a mirror. The companies that drove the spread, Nvidia, Microsoft, Apple at peak weighting, Alphabet, Meta, and Amazon, are precisely the ones Buffett either never owned in size or began trimming aggressively. The same discipline that has produced his long-term track record kept Berkshire underweight the very basket that won the decade. Whether that discipline is vindicated by an extended period of mean reversion or whether the mega-cap growth basket continues to compound at premium rates is the open question. The answer matters more for Abel’s first three years than almost any other variable he inherits.

Here’s where the analysis usually stops. It shouldn’t.

The calculation of the opportunity cost of Buffett’s cash assumes Berkshire could have deployed $397 billion into the S&P 500 at index returns. That’s a fantasy. Berkshire doesn’t allocate to index funds, even though Buffett often recommends that individual investors do. The mandate is to buy entire businesses or substantial equity stakes in great companies at fair prices. By 2024, those opportunities at Buffett’s required hurdle rate had effectively disappeared. Q1 2026 confirmed that Abel inherited the same problem.

The chart above isn’t an indictment of Buffett, but rather a mirror. The companies that drove the spread, Nvidia, Microsoft, Apple, at peak weighting, Alphabet, Meta, and Amazon, are precisely the ones Buffett either never owned in size or began trimming aggressively. The same discipline that has produced his long-term track record kept Berkshire underweight the very basket that won the decade. Whether that discipline is vindicated by an extended period of mean reversion or whether the mega-cap growth basket continues to compound at premium rates is the open question. The answer matters more for Abel’s first three years than almost any other variable he inherits.

Here’s where the analysis usually stops. It shouldn’t.

The calculation of the opportunity cost of Buffett’s cash assumes Berkshire could have deployed $397 billion into the S&P 500 at index returns. That’s a fantasy. Berkshire doesn’t allocate to index funds, even though Buffett often recommends that individual investors do. The mandate is to buy entire businesses or substantial equity stakes in great companies at fair prices. By 2024, those opportunities at Buffett’s required hurdle rate had effectively disappeared. Q1 2026 confirmed that Abel inherited the same problem.

The relevant counterfactual isn’t “S&P 500 returns minus Treasury yields.” The relevant counterfactual is what equities Berkshire could have actually bought, in the size it needed, at prices the team would defend in an annual letter. That set was very nearly empty in 2024. It remains nearly empty today.

There’s a second issue. Buffett’s actual track record requires you to measure performance over full cycles, not just the rising part of one. In 2022, when the S&P 500 fell 18%, Berkshire gained 4%. The cash looks like a drag in a bull market. However, it becomes the most valuable asset in the conglomerate’s portfolio when the cycle turns. Abel inherits that firepower at a moment of historically extreme valuations across the S&P 500. He used his first quarter to grow it rather than spend it. The full accounting will require seeing what he does with the dry powder over the next two to three years.

What This Means For Your Portfolio

If you’re managing your own money, the temptation is to map Buffett’s actions directly onto your situation. That’s a mistake. You’re not Berkshire or Warren Buffett. You don’t have a $1 trillion balance sheet, a 100+ year portfolio duration, and you don’t need to deploy $50 billion to move the needle. However, you can buy a $10,000 position in a great company without distorting the price of that company’s stock.

What you can take from this is more philosophical.

• Yes, valuation matters. The S&P 500 entered 2026 at one of the most expensive starting points in history, with a CAPE ratio above 40 and a forward P/E that historically correlates with poor 10-year forward returns. Buffett’s cash position was a market signal even if it wasn’t a market call.

• Sequence-of-returns risk is also real, especially for retirees or those approaching retirement. A market correction in the early years of retirement does permanent damage to a portfolio that a 30-year-old can absorb without consequence. Building a cash buffer when valuations are extreme is sound risk management, not market timing.

• And finally, discipline beats fear of missing out. Every cycle produces a chorus of voices arguing that valuation no longer matters because of some structural innovation. In 1999, it was the internet. In 2007, it was the new financial alchemy of structured credit. In 2024, it was AI. The names change. The discipline that protects capital across cycles does not.

Regardless of where you align, the next two years will tell us whether the $397 billion cash hoard was the most prescient capital allocation decision of the cycle, or whether Abel will eventually validate the critics by paying up for assets Buffett refused to chase. His first quarter answered the immediate question. He kept selling, kept the discipline, and he let the cash hoard grow. I have my view on what comes next. The data, the discipline, and the sixty years of history all point in the same direction.

But I’ve been wrong before, and so has Buffett. We’ll find out together.

Tyler Durden Mon, 05/18/2026 - 12:40

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Iran Counter-Blockade Bites As No Tankers Load At Kharg For 10th Day

Earlier today, in response to news that the number of tankers anchored at Iran's Kharg Island oil terminal had hit a post-blockade peak, we wondered if this means that Iran is running out of tankers to store oil, i.e., Trump' blockade of the blockade is working. In any case, it certainly means that Iran is no longer able to sell any of the oil, depriving it of much needed oil export revenues which it has found itself forced to shut in as there is no open downstream path for the product.

Tanker Tally at Iran’s Kharg Island Hits Post-Blockade Peak: BBG

Running out of tankers to store oil.

— zerohedge (@zerohedge) May 18, 2026

A few hours later, Bloomberg echoed question, writing that Iran’s main oil export facility in the Persian Gulf stayed devoid of tankers for at least a 10th day, underscoring the growing strain on Tehran from a US naval blockade.

Using Sentinel satellite data of Kharg Islan, Bloomberg found that since May 8, no loadings of large ocean-going tankers are visible at the facility’s crude-export berths. 

Oil tankers anchored near Iran’s Kharg Island oil terminal on May 16, 2026. Red circles are very large crude carriers

The counter blockade is depriving Tehran of critical petroleum revenue and the market of millions of barrels of supply. Prior to the US blockade, Iran was by far the largest - if not only - country exporting its crude because the Islamic Republic had blocked other countries’ ships from using the strait.

With no loaded tankers departing Kharg even as oil keeps arriving at the country's largest oil terminal, it remains unclear how much of a factor lack of spare capacity has become as Trump hopes to cripple Iran's oil production with lenghty shut-ins. Bloomberg' Julian Lee writes that it’s hard to say the speed at which Kharg' remaining capacity might fill given that Iran has curbed its output in response to the American blockade.

One possibility is that it’s cheaper for Tehran to use on-land facilities rather than filling ships, something that might help to explain the absence of loadings and a simultaneous buildup of tankers in nearby anchorage areas.

Here, Bloomberg's other energy analyst Javier Blas chimes in, and notes that Iran is still loading crude into tankers (although not in Kharg Island). Instead, it's loading a tanker at Jask, an alternative terminal outside the Strait of Hormuz. But since it is inside the US Navy blockade line, those tankers are likely only being used for storage purposes. 

An image on Monday from the European Union’s Sentinel 1 satellite, examined by Bloomberg, shows a ship moored at Jask’s loading buoy. A separate image from the Sentinel 2 orbiter from Sunday shows an Aframax-sized vessel heading toward the mooring.

Iran is still loading crude into tankers -- although (not right now) in Kharg Island. Instead, it's loading a tanker at Jask, an alternative terminal outside the Strait of Hormuz (but inside the US Navy blockade line).

Left May 17 🛰️Sentinel-2; right, May 18 🛰️Sentinel-1 pic.twitter.com/iU2o6YXAmD

— Javier Blas (@JavierBlas) May 18, 2026

Vessel-tracking data compiled by Bloomberg identify the tanker as the Vernon, a ship that has been sanctioned by the US for its involvement in Iran’s oil trade. It remains to be seen if the ship will attempt to get through the American cordon.

There were no telephone or email contact details for the Panama-based company listed as the ship’s beneficial owner and manager on the Equasis maritime database, while emails to the ISM manager, based in Hong Kong, were returned as undeliverable

While Tehran appears to have shifted its primary loading terminal from Kharg to Jask, loading at Jask remains uncommon. The port has seen only nine carriers filled since the terminal was officially opened in 2021. Of those, five have taken place since the war began at the end of February.

Up to Friday, the US Navy had redirected 75 Iran-linked commercial vessels and disabled a further four since it imposed its blockade on April 13, US Central Command said in posts on X last week.

Tyler Durden Mon, 05/18/2026 - 12:20

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Russian Drone Hits Chinese Ship In Black Sea, Less Than 24-Hours Before Xi-Putin Summit

Just 24 hours before Presidents Vladimir Putin and Xi Jinping are set to meet for their planned summit in Beijing, soon on the heels of Trump's visit, and a geopolitical wrench may have just been thrown into the works.

According to Ukrainian President Volodymyr Zelensky, Russian forces have attacked a Chinese ship heading toward a Ukrainian port - a provocative move that threatens to seriously anger Beijing at the worst possible diplomatic moment.

via Ukraine Navy

Early Monday morning, a Russian drone reportedly struck the KSL Deyang, a vessel flying under the Marshall Islands flag, just off the coast of Ukraine, Reuters also confirms.

The ship was reportedly empty at the time while en route to Ukraine's Pivdennyi port in the Odesa region to load up on iron ore concentrate.

A fire was observed on board, but it was quickly brought under control and extinguished, with the vessel escaping severe damage. 

The Ukrainian government is alleging this wasn't some kind of accidental fog-of-war blunder, with President Zelensky immediately calling out Moscow:

“Drones struck Odesa ... and one of the UAVs hit a vessel owned by China. The Russians could not have been unaware of what vessel was at sea,” Zelensky said.

A Ukrainian navy spokesman told AFP that none of the crew members, all Chinese nationals, were injured. He added that the vessel continued on its journey.

“The ship was entering for loading. After it was hit at night by a Shahed, the crew coped with the consequences on their own. Fortunately, no one was injured, and the vessel continued on its way to its port of destination,” navy spokesman Dmytro Pletenchuk said.

The incident went down just after on Sunday Xi and Putin had just exchanged "congratulatory letters" to set the stage for Putin's upcoming arrival in Beijing. 

The China-owned vessel wasn't the only ship attacked within that span of time. According to The Independent:

Russia attacked a Panama-flagged civilian vessel heading to Ukraine's Chornomorsk port in the southern Odesa region on the Black Sea early on Monday, the regional governor said.

It is one of several ships destined for Ukrainian ports that have been struck by Russian forces in the past day.

The vessel was damaged in the attack, which caused a fire, Governor Oleh Kiper said on the Telegram messaging app, adding that no one had been injured in the incident and that the crew had extinguished the fire. The vessel has continued on its way, the governor added.

TradeWinds is also suggesting a third ship was struck, but few details have been given. Black Sea transit continues to be a dangerous prospect, also with naval mines long being a feature of the 4+ year long war.

Tyler Durden Mon, 05/18/2026 - 12:00

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