Core Viewpoint - Berkshire Hathaway reported a significant shift in investment strategy, with CEO Warren Buffett indicating a cautious approach to the stock market, as evidenced by the company's status as a net seller of stocks despite holding a record $382 billion in cash and short-term investments [2][3][9]. Group 1: Investment Strategy - Berkshire Hathaway has been a net seller of stocks for 12 consecutive quarters, with total net sales amounting to $184 billion during this period [5]. - The company currently holds $382 billion in cash and short-term investments, surpassing the market capitalization of most S&P 500 companies [6]. - Buffett's recent selling trend is attributed to the company's larger size and a perceived lack of attractive investment opportunities, as well as concerns over elevated stock market valuations [7]. Group 2: Market Implications - Historically, the S&P 500 has underperformed following quarters in which Buffett was a net seller, with an average one-year return that is 5 percentage points lower under such circumstances [8]. - The S&P 500's CAPE ratio reached 39.5 in October, a level that has historically indicated potential losses in the following years [9].
Warren Buffett Sends Investors a $382 Billion Warning. History Says the Stock Market Will Do This Next.