Warren Buffett Sends Investors a $344 Billion Warning.

 

Warren Buffett Sends Investors a $344 Billion Warning. History Says the Stock Market Will Do This Next.

Aug 4, 2025 at 4

Key Points

Warren Buffett's Berkshire Hathaway was a net seller of stocks in the second quarter despite holding a near-record $344 billion in cash and equivalents.

The S&P 500 currently has a cyclically-adjusted price-to-earnings (CAPE) ratio of 37.8, a very expensive valuation seen less than 5% of the time throughout history.

Following incidents where the S&P 500's monthly CAPE ratio measured 37 or more, the index has usually declined over the next one, two, and three years.

10 stocks our analysts like better than S&P 500 Index ›

The S&P 500 currently trades at an expensive valuation that has historically signaled trouble for investors.

Warren Buffett's Berkshire Hathaway (BRK.A -1.16%) (BRK.B 0.18%) held $344 billion in cash and equivalents in the second quarter, just shy of the $348 billion it reported at the end of the previous period. The company was also a net seller of stocks for the 11th straight quarter.

Together, those capital allocation decisions amount to a grim warning for investors: Buffett sold more stock than he bought despite his company holding a near-record amount of investable cash, and despite the S&P 500 (^GSPC -1.60%) plunging as much as 19% from its record high during the second quarter.

Buffett evidently sees very few compelling buying opportunities in the stock market, likely because the S&P 500 trades at a historically expensive valuation. That applies to his own company. Buffett, after repurchasing $78 billion in Berkshire stock over a period of 24 quarters, has now gone four consecutive quarters without repurchasing a single share.see more..