Warren Buffett Retires With a $187 Billion Warning to Investors. History Says the Stock Market Will Do This Next.
This weekend, Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) released its full-year financial report, and it contained a final warning from former CEO Warren Buffett, who retired in December.
Berkshire was a net seller of stock in the fourth quarter, meaning it sold more stock than it purchased. The company has now been a net seller in 13 straight quarters, which suggests Buffett has struggled to find attractive investments in the current market environment.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
Rich valuations are the most plausible culprit. The S&P 500 (SNPINDEX: ^GSPC) is currently so expensive that history says the index could drop 30% in the next three years. Here are the important details.
In 2018, Warren Buffett told CNBC, “It’s hard to think of very many months when we haven’t been a net buyer of stocks.” However, the opposite is true today. Warren Buffett and fellow portfolio manager Ted Weschler have been net sellers in 13 straight quarters, with net stock sales totaling $187 billion over that period.
On one hand, Berkshire is much larger today than it was in 2018. The company’s tangible book value has more than doubled and currently sits at around $580 billion. That means few potential investments would move the financial needle for the company. Said differently, Buffett and Weschler have had a somewhat limited pool of stocks from which to choose.
On the other hand, Berkshire has regularly purchased some stock since its streak as a net seller started in late 2022. Last year, the company started positions in UnitedHealth Group, Alphabet, and The New York Times. But Buffett and Weschler still sold more stock than they bought in every quarter despite having over $300 billion in cash and equivalents on the balance sheet.
Why is that a warning? That Berkshire’s net sales have totaled $187 billion since late 2022 suggests Buffett and Weschler are concerned about elevated valuations across the stock market.
The S&P 500 recorded an average cyclically adjusted price-to-earnings (CAPE) ratio of 39.8 in February 2026. Apart from the last few months, that is the highest reading since the dot-com crash in October 2000. In fact, the S&P has recorded a CAPE multiple of above 39 during only 26 months since it was created in 1957 (which was 829 months ago).
