Every quarter, investors full of excitement wait for the release of Berkshire Hathaways (NYSE: BRK.A) (NYSE: BRK.B) 13F submission. The Securities and Exchange Commission (SEC) requires that most major funds announce which shares they had at the end of each quarter. This effectively enables the public to see which stock funds buy and sell.
Many investors keep a close eye on the 13F application from Berkshire Hathaway, because the conglomerate is run by none other than Warren Buffett, perhaps the biggest investor ever. The interests of Buffett and Berkshire not only offer a glimpse into which companies they like, but also how some of the greatest investing spirits think.
In the newest 13F in Berkshire, Buffett made a tumultuous warning to Wall Street about the stock market. It cannot be clearer.
There is no shortage of investors who think the market is overvalued. After all, we have been in a bull bull market of more than two years and the wider benchmark S&P 500 has registered annual returns of more than 20%. Buffett seems to be one of these investors. In 2024, Buffett and Berkshire collected cash and at the end of the third quarter more than $ 320 billion in cash and short -term factors.
Berkshire also sold more shares than bought it in 2024, including large chunks of some of the largest positions such as such as such as Apple And Bank of America. If you are an investor who studies Buffett and Berkshire, you know that they have a talent for weathering recessions and falling back. Some attribute this great timing to the reason why Berkshire’s shares have been crushing the stock market for decades.
In the recent 13F of Berkshire, the Oracle of Omaha made a tumultuous warning to Wall Street. Berkshire left two exhibition -related funds (ETFs) that follow the wider market: the SPDR S&P 500 ETF (Freshly sampled: spy) and the Vanguard S&P 500 ETF (Nysemkt: flight).
If someone now sells a share, this does not necessarily mean that the company is in a poor place. Maybe the insider needed the money to make a big purchase. In this scenario, however, we know that Berkshire did not need the money to see his huge stock. It cannot be clearer that Buffett and the Berkshire team think that the market is overvalued. Berkshire bought both ETFs at the end of 2019, and this is the first time that both of the position changed in more than five years.
This is not that surprising, given that different indicators have suggested that the market is either overvalued or that the economy can quickly tip in a recession. Some examples are the reverse yield curve and the Shiller Cape Ratio, which compares the price of the S&P 500 with the average inflation-corrected income of 10 years to smooth out irregularities. As you can see below, the Cape Ratio is traded above the average of five years and almost highlights just before the market was sold intensely in 2022 (from February 16).
