Warren Buffett’s $382 Billion Cash Warning: What Investors Need to Know

TLDR

• Warren Buffett has been a net seller of stocks for 12 consecutive quarters, the longest streak since he took over Berkshire Hathaway
• Berkshire’s cash stockpile has reached a record $381-382 billion as Buffett prepares to step down as CEO at the end of 2025
• Despite selling stocks, Buffett maintains over $300 billion in stock holdings and continues buying selectively, including recent positions in Alphabet and UnitedHealth Group
• The S&P 500 Shiller CAPE ratio has reached 40, suggesting stocks are at one of their priciest levels in history
• Buffett’s actions reflect caution about high market valuations rather than panic, with short-term U.S. Treasuries yielding above 3.5%

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Warren Buffett has been reducing Berkshire Hathaway’s stock positions for 12 consecutive quarters, marking the longest such streak since he took control of the company. The billionaire investor has built Berkshire’s cash reserves to approximately $382 billion, the highest level in the company’s history.

Buffett is preparing to step down as Berkshire Hathaway’s CEO at the end of 2025. His extended selling streak reflects an unprecedented level of caution from the investor known as the “Oracle of Omaha.”

Despite the heavy selling activity, Berkshire still maintains more than 40 stock positions valued at over $300 billion. The company has held onto long-term positions in companies like American Express and Coca-Cola.

The S&P 500 has reached all-time highs in recent trading. The S&P 500 Shiller CAPE ratio, an inflation-adjusted measure of stock prices relative to earnings, has climbed to 40.

This valuation level has only been reached once before in market history. The elevated ratio suggests stocks are trading at some of their highest prices ever relative to company earnings.

Market Conditions Drive Conservative Approach

Buffett wrote in a 1987 letter to shareholders that stocks cannot outperform businesses indefinitely. He warned that euphoria in bull markets can disconnect stock rewards from actual business performance.

The investor has not publicly explained his recent moves. However, his past comments emphasize buying stocks at reasonable valuations and not overpaying for popular companies.

In his letter to shareholders last year, Buffett stated that buying opportunities are not generally abundant. He wrote that often nothing looks compelling in the market.

Short-term U.S. Treasuries currently yield above 3.5%. This rate allows investors to earn returns on cash while waiting for better stock buying opportunities.

Selective Buying Continues Despite Caution

Buffett has not stopped buying stocks entirely during this period. He opened a position in Alphabet during the third quarter of 2025.

Berkshire also initiated a position in UnitedHealth Group during the second quarter. These purchases show Buffett continues to find value in select companies despite high overall market valuations.

The investor applies consistent criteria for stock purchases regardless of external market conditions. He focuses on attractive valuations relative to growth prospects, the same approach he has used for decades.

Buffett once compared stock investing to baseball, saying the stock market is a no-called-strike game. Investors do not have to swing at everything and can wait for the right opportunities.

Berkshire’s cash position gives the company flexibility to make large investments when prices become more attractive. The cash pile has grown steadily over the past three years as stock sales have exceeded purchases.

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