Core Insights - Warren Buffett has sold more stocks than he has purchased for 12 consecutive quarters, indicating a significant shift in his investment strategy [1][3][8] - Berkshire Hathaway's Class A shares have achieved a cumulative return of over 5,780,000% over the past 60 years, significantly outperforming the S&P 500 [2] - The recent trading activity shows a net sale of $6.099 billion in stocks during the third quarter of 2023, with total net selling activity amounting to $183.53 billion since October 1, 2022 [6][8] Investment Activity - In Q3 2023, Buffett oversaw purchases of $6.355 billion in equities and sales of $12.454 billion, marking a continued trend of net selling [6][7] - The net selling activity has been consistent, with previous quarters showing net sales of $14.64 billion in Q4 2022, $10.41 billion in Q1 2023, and $7.981 billion in Q2 2023 [7][8] Market Valuation Concerns - The "Buffett Indicator," which measures the market-cap-to-GDP ratio, recently hit an all-time high of 225.51%, indicating that the stock market is historically expensive [10][11] - The S&P 500's Shiller Price-to-Earnings (P/E) Ratio reached 41.20, marking the second-highest level during any continuous bull market since 1871 [12] Long-term Strategy - Despite the record net selling activity, Buffett maintains a long-term perspective, holding $381.6 billion in cash and equivalents, indicating a cautious approach to current market valuations [15][17] - Berkshire's investment portfolio remains substantial at $313.6 billion, with a focus on core positions deemed "indefinite" holdings [16][17] Economic Outlook - Buffett's strategy reflects an understanding of economic cycles, with historical data showing that U.S. recessions typically last around 10 months while expansions last approximately five years [18][21] - The S&P 500 has recently confirmed a new bull market, rising 20% from its closing low on October 12, 2022 [19]
Billionaire Warren Buffett's $184 Billion Warning to Wall Street Has Hit a Deafening Roar