Buffett Warns of Market Trouble With Berkshire Holding $370 Billion Cash
Updated
Updated · The Motley Fool · Jul 19
Buffett Warns of Market Trouble With Berkshire Holding $370 Billion Cash
3 articles · Updated · The Motley Fool · Jul 19
Summary
$370 billion in cash, cash equivalents and short-term Treasuries sat on Berkshire Hathaway's balance sheet as Buffett exited as CEO after another quarter of net stock selling.
Buffett tied that caution to a market he called more speculative than ever, saying rich prices have left few attractive opportunities for value investors.
237% on the Buffett Indicator and 42.2 on the CAPE ratio both signal extreme valuations, with the latter previously reached only during the dot-com era.
314% gains for the S&P 500 over the past decade, Nvidia's 15,610% surge and SpaceX's $1.7 trillion valuation on $18.8 billion annualized revenue underscore the exuberance Buffett is warning about.
Those metrics suggest weaker long-term equity returns may lie ahead, even as the report notes valuation fears have persisted through much of the bull market.