Warren Buffett’s Stock Market Warning

The first thing we found when we traced the story back is how little Buffett has said in public this year. In November 2025 he told shareholders that he would no longer write Berkshire’s annual report letter or speak at length at the annual meeting, and he handed the chief executive role to Greg Abel on January 1. The May 2 meeting in Omaha was run by Abel; Buffett sat in the front row. His one extended comment of the weekend came in a CNBC interview with Becky Quick on the sidelines, where he said he had never seen people in a more gambling mood than now.

He went on to call one-day options trading gambling, and, according to coverage of the interview, said that an awful lot of prices would look very silly in hindsight. Coverage also reports that he did not predict a crash or name a timeline, and that he repeated the same theme of spending less on gambling and more on investing in July. TheStreet’s recap adds a line from the meeting: he said that if there is a big decline, Berkshire will deploy capital. The operative word is big, and he did not say how big.

The pattern across these rows is that each headline takes a true statement and drops its limits. Buffett did say prices looked frothy, and Berkshire did hold record cash. What he did not say is that ordinary investors should abandon stocks, and what Berkshire did not do is stay out. If a post claims to quote him, look for the date and the original interview, not the thumbnail.

One more piece of context is easy to miss. A man who ran Berkshire for six decades told CNBC he thinks only about five of those years were truly juicy with opportunity, according to TheStreet’s report of the interview. That is a statement about patience: most years are ordinary, and the skill is waiting. It is not a statement that the next year will be a crash.

In our comparison of reports we found that outlets quote different cash totals for the same period: $373 billion, $380 billion and $397 billion all appear around the spring, depending on the date and what is counted. We use CNBC’s figures, which are tied to Berkshire’s quarterly reports: a record $397.4 billion in cash, equivalents and short-term Treasury bills at the end of March, falling to $365.5 billion at the end of June. Another outlet reports $364.7 billion and $23.5 billion of gross stock purchases for the same quarter, which is a different measure from CNBC’s net figure of nearly $20 billion.

The bigger story is the turn. Berkshire reported operating earnings up 16% in the second quarter, repurchased about $4.5 billion of its own shares, and, in the quarter that ended June 30, bought more stock than it sold for the first time in 14 quarters. Commentators attribute the cash decline to those stock purchases, the buybacks and acquisitions, including a homebuilder deal. Treat the attribution as reporting, since we could not read the full filing.

Why does a company hold this much cash? The honest answer has three parts. First, Buffett said repeatedly that he could not find enough attractive values in the stock market. Second, size matters: a company with a stock portfolio near $300 billion cannot make a meaningful bet on a small company, so its pool of acceptable targets is thin. Motley Fool’s 2024 analysis of the same cash made this point and cautioned that the pile says more about the conglomerate’s size than about the stock market. Third, cash is no longer dead money: Berkshire’s cash is mostly short-term Treasury bills, and when the Fed raised rates, one analysis estimated its annual interest income rose by about $900 million.

Put those three together and the cash pile reads less like a siren and more like a company waiting to be paid for patience. That is a very different message from the viral one.

Remember also that Berkshire’s holdings are concentrated. One portfolio tracker reports that about 63% of Berkshire’s roughly $355 billion equity portfolio sits in five stocks: Apple, American Express, Coca-Cola, Bank of America and Alphabet. That is how Berkshire invests, and it is not a template for a household. A concentrated position that works for a company with $365 billion in cash behind it can be dangerous in an ordinary account.

The Buffett Indicator divides the total value of US stocks by gross domestic product. Buffett once called it probably the best single measure of where valuations stand, and that quote is why it carries his name. In our review we found no single current reading. A tracker on GuruFocus showed 238.3% on October 10, which it labels a record. A Motley Fool piece published in early October put it near 236%. The Federal Reserve’s own Z.1 data, which a trading-tools site used, put the official first-quarter reading at 250%, below a record of 265% in the fourth quarter of 2025. A market-close estimate in late August reached 289%, and another analysis put the first-quarter number at 218.1% using a third GDP estimate.

Differences like that are not errors so much as choices: which stocks to count, whether to use the latest GDP estimate, and whether to use a quarter-end figure or a daily one. The takeaway is directional. Every version sits far above the long-run median near 81.5%, and none of them tells you when prices will change. One gauge’s own description calls it a valuation measure with no near-term timing value, and a Dunham analysis lists its blind spots: overseas revenue earned by US companies, private markets and the Federal Reserve’s balance sheet.

Valuation is only half of the picture. The Federal Reserve, led by Chair Kevin Warsh, raised the federal funds target range by a quarter point to 3.75%–4.00% on September 16 in a unanimous 12-0 vote, its first increase since 2023, citing inflation tied partly to spiraling oil prices. The median projection points to one more increase by year-end, and the minutes released October 7 said most officials expected another. The next decision is October 28, with September CPI due October 14.

Bond markets have moved with it. U.S. Bank reported the 10-year Treasury yield at 5.02% and the two-year at 4.74% on September 16, and CNBC’s October 9 market report noted longer-dated yields reaching new 24-year highs that week. Brent crude traded above $100, with one report citing $107 after an attack on a Saudi airport. Even so, the S&P 500 closed at 7,811.54 on October 9, within reach of the record set three days earlier, helped by earnings expectations. Schwab also reported money market inflows at a six-year high, a sign that many investors are parking cash as yields rise.

That mix is the real reason valuation talk feels heavier this year. When yields on safe Treasuries approach 5%, stocks have to compete with something that pays without volatility. When inflation is oil-driven, the Fed has less room to cut if stocks wobble. And when the index is near a record while only about a third of its stocks trade above their 50-day averages, the rally is narrower than the headline level suggests. None of these facts is a prediction. Together they explain why a careful investor, and a careful Buffett, might be patient.

These numbers should cut in two directions. They show that a 35% decline is not a freak event; it is a normal part of owning stocks, roughly every five years. And they show that sitting out has a price, because the best days cluster next to the worst. J.P. Morgan’s research, cited by Motley Fool this month, found that seven of the 10 best days between 2005 and 2025 fell within two weeks of the 10 worst days. A forecast of a coming decline is therefore not, by itself, a basis for a trade.

In November 2025, Berkshire Hathaway took the unusual step of issuing a press release headed “It’s Not Me,” saying a series of AI-generated videos on YouTube were using Buffett’s likeness and a flat, generic voice to push fake investment advice. One video it singled out was titled as the number one investment tip for everyone over 50. Berkshire called the phenomenon a spreading virus and told viewers to verify supposed Buffett messages through official channels. The company’s website also carries a statement that Buffett does not currently endorse investment products and will not in the future.

In our review of how these scams work, we found a consistent pattern. A video or ad shows a trusted figure, creates urgency about a coming crash, and funnels you toward a private group, a trading platform or a financial product. New York’s attorney general warned in 2024 that scammers were using AI to impersonate trusted business leaders. The older audience is targeted because the fear is more believable and the savings are larger.

If you want evidence instead of commentary, go to the source. Large investment managers, including Berkshire, file a Form 13F with the Securities and Exchange Commission within 45 days after each quarter ends, listing their US-traded stock positions. It is searchable on EDGAR. Two limits matter: the filing is delayed by weeks, so it is a rear-view mirror, and it covers long stock positions, not cash, bonds or private deals. That is why Berkshire’s own quarterly report and the 13F can be read together but not interchanged.

Use the same discipline for any adviser who claims to know what Buffett would do. A fiduciary advisor, who is legally bound to act in your interest, can be checked on FINRA’s BrokerCheck and the SEC’s adviser database. Ask how they are paid, what the all-in fees are and what happens to your money in a 35% decline. A good answer is specific, and a bad one starts with a prediction.