Core Viewpoint - The article discusses Warren Buffett's recent trend of being a net-seller of stocks, particularly highlighting his lack of purchases in Berkshire Hathaway shares over the past 16 months, attributed to high valuations in the market [1][4][14]. Group 1: Market Valuation - The "Buffett Indicator," which measures the total value of publicly traded companies against U.S. GDP, reached an all-time high of over 225%, significantly above its historical average of approximately 85% since 1970 [1]. - Berkshire Hathaway's stock has been trading at a premium of 60% to 80% above book value during the period Buffett has refrained from repurchasing shares, compared to a previous range of 30% to 50% above book value [15][16]. Group 2: Investment Activity - Warren Buffett has been a net-seller of stocks for 12 consecutive quarters, totaling $183.5 billion in net sales, despite having transformed Berkshire Hathaway into a trillion-dollar enterprise through acquisitions and investments [2][7]. - Buffett has not repurchased any shares of Berkshire Hathaway for 16 months, marking a significant shift from his previous strategy of buying back shares for 24 consecutive quarters, during which he spent nearly $78 billion [13][14]. Group 3: Investment Philosophy - Buffett remains a long-term optimist about the U.S. economy but is cautious about equity purchases when valuations are high, indicating a disciplined investment approach [3][19]. - The article emphasizes Buffett's patience and opportunistic investment style, suggesting that he is waiting for more favorable market conditions to deploy Berkshire's substantial cash reserves [18][22].
Warren Buffett Has Now Gone 16 Months Without Buying His Favorite Stock -- and the Likely Reason Why Is Frightening