SynopsisWarren Buffett has long warned against long-term bonds, calling them a poor investment for investors with extended horizons. Yet Berkshire Hathaway has amassed a huge short-term Treasury position, highlighting the distinction between long-duration bonds and cash-like instruments. As global yields surge, Buffett’s bond strategy offers a timely lesson for investors.AgenciesAs global bond yields continue to soar to multi-year highs amid ballooning government debt, investors remember why market legend Warren Buffett once called long-term bonds “terrible” but heavily invested in short-term bonds years later.In his 2017 annual letter to Berkshire Hathaway shareholders, Buffett advised investors to ignore the price swings on Wall Street and the temptation to load up on bonds despite soaring yields. He called it a "terrible mistake" for investors with long-term horizons to measure their investment "risk" by their portfolio's ratio of bonds to stocks."There is simply no telling how far stocks can fall in a short period," Buffett said. "As an investor's investment horizon lengthens, however, a diversified portfolio of US equities becomes progressively less risky than bonds, assuming that the stocks are purchased at a sensible multiple of earnings relative to then-prevailing interest rates,” he added.Indian bonds join global debt selloff, bruised by oil and US Treasury yieldsIndian government bonds faced further declines for the fifth consecutive session as U.S. Treasury yields approached three-year peaks. The surge in oil prices reignited inflation concerns, particularly impacting India due to its status as a major importer. This scenario intensified expectations for monetary policy adjustments by the RBI. Critical upcoming events include the U.S. FOMC meeting and fluctuations in oil prices.In December 2007, Buffett bet that over the next 10 years, a portfolio consisting of hedge funds would not be able to beat the S&P 500 index.In his 1979 letter to Berkshire shareholders, Buffett highlighted that he has severe doubts as to whether a very long-term fixed-interest bond, denominated in dollars, remains an appropriate business contract in a world where the value of dollars seems almost certain to shrink by the day.Also read | Still holding cash at home? Warren Buffett calls it oxygen, but says it’s not good as an assetBerkshire Hathaway's massive bond investmentsHowever, Buffett’s bearish view on bonds was limited to long-term contracts. While the majority of Berkshire’s portfolio consisted of equity bets, he allocated a portion to short-term US bets. He believed that such bond investments ensured liquidity.Berkshire Hathaway last year doubled its ownership of Treasury bills and owned 5% of all short-term Treasuries, according to a JPMorgan report, cited by CNBC. As of March 2025, the total US Treasury bill market stood at $6.15 trillion, while Buffett’s firm amassed $300.87 billion. This meant that Buffett controlled nearly 1 in every 20 dollars in circulation within the system at that time.Investors remember the billionaire's investment strategy amid the ongoing global bond selloff. The yield on 10-year US Treasury notes rose to a near three-year high of 4.81%, amid an overall global selloff in the bond market as the Middle East conflict pushes energy prices higher, boosting investor fears about inflation and ballooning government debt. Japan's ⁠10-year yield meanwhile soared to a 30-year high above 3%. Australia's 10-year government bond yields rose to 5.198%, their highest level in over 15 years. Bond yields move inversely with bond prices.Indian 10-year bond yields also joined the rally, briefly topping 7% for the first time in three months on Wednesday as a deepening global debt selloff and a fresh spike in oil prices rattled investors. Rising bond yields typically make the debt market more attractive to investors, which often leads to some downturn in the equity market.Also read | Why is market falling today? Sensex, Nifty selloff wipes out Rs 5 lakh crore investor wealth: 5 key factors(With inputs from agencies)(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)Read More News on(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. 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