Warren Buffett Issues $100B Warning To Investors Right Now

When Warren Buffett’s Berkshire Hathaway’s makes a major move, pay close attention.

Most times, his moves serve as a key barometer of the direction of the overall market. For example, in 2024, Berkshire sold $134 billion worth of stock. The firm was also a net seller of $34 billion in 2023, and a net buyer of $34 billion in 2022.

Key Points About This Article 

• “Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned.”
• However, in 2024, Buffett struggled to find solid stocks and instead stashed away more cash. That’s a very clear warning to Wall Street.
• The S&P 500 returned a total return of 141% in years when Berkshire was a net buyer in the preceding year. The index returned about 93% when Berkshire was a net seller in the preceding year.
• Are Warren Buffett’s stocks a good fit for your portfolio? Schedule a meeting with a financial advisor near you and find out. Click here to get started today. (Sponsored)

Berkshire is also sitting on about $318 billion in cash and cash equivalents at the close of 2024, which is about double the total amount held a year earlier. In addition, as noted in a recent Berkshire shareholder letter: “Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned.”

All things considered, Buffett struggled to find solid stocks last year and instead stashed away more cash. That’s a very clear warning to Wall Street.

Historically, here’s how the S&P 500 performed the year after Buffett was a net seller.

In 2023, the S&P 500 jumped 23%. In 2021, the S&P 500 fell 19%. In 2020, the index jumped 27%. In 2016, the index jumped 19%. In 2014, the S&P 500 fell 1%. In 2012, it was up 30%. And in 2010, the S&P was flat on the year. That gives us an average of 11% since 2010 again following a year where Buffett was a net seller. If we look at the cumulative returns of the S&P 500 since 2010, there’s an average annual return of 13%.

In short, in years where Berkshire has been a net seller, we’ve seen below-average years follow. With the firm a net seller of $134 billion in 2024, we can assume 2025 could be below average, too.

Also, consider this.

The S&P 500 returned a total return of 141% in years when Berkshire was a net buyer in the preceding year. The index returned about 93% when Berkshire was a net seller in the preceding year. And while we’d need a crystal ball to tell you what could happen in 2025 (ours is in the shop for repair), Buffett’s actions and their history tell us 2025 could be below average.

It’s just something to keep in mind if you’re hunting for an opportunity in this crazed market — especially with tariffs, an intensifying trade war, fears of inflation, and growing concerns about a potential recession.