Buffett's $175B Selloff Sends Warning

Berkshire has sold $175B in stock since 2022 as the Buffett indicator hits record highs.

Berkshire Hathaway has sold a net $175 billion more in stock than it has purchased since October 2022, according to AOL.com, a figure corroborated by Ascendants.in. The Motley Fool reports that Berkshire's cash position now stands at roughly $365.5 billion, including cash, cash equivalents, and short-term U.S. Treasury investments. AOL.com details that Buffett and his successor Greg Abel were net sellers of equities in 14 of the last 15 quarters, with the sole reversal coming in Q2 2026 when AOL.com reports Berkshire purchased approximately $19.8 billion in net equities. Buffett retired as Berkshire's CEO on December 31, 2025, per AOL.com.

The Motley Fool and Ascendants.in both report that the Buffett indicator — the ratio of total U.S. stock market capitalization to GDP — stands at 238%, while AOL.com reports a slightly different figure of 240.32% recorded on August 12. All three sources note this is an all-time high. In a 2001 Fortune article referenced by both The Motley Fool and Ascendants.in, Buffett warned that investors would be "playing with fire" if the ratio approached 200%. AOL.com reports the Shiller CAPE ratio above 41, while Ascendants.in places July's reading at 40.6, its highest level since September 2000. According to Ascendants.in, a monthly CAPE of at least 40 has occurred only 30 times since the S&P 500's creation in 1957.

AOL.com provides a detailed breakdown of Berkshire's net equity transactions across 15 quarters. The selling peaked at $75.5 billion in Q2 2024 and included another $34.6 billion in Q3 2024. Even after Buffett's retirement, net selling continued through Q1 2026 at $8.1 billion before the Q2 2026 reversal. Ascendants.in notes that Buffett has described current market behavior in unusually blunt terms, telling CNBC's Becky Quick that "it's tough to find values when everybody is preferring gambling" and that "we've never had people in a more gambling mood than now." The Motley Fool reports that Buffett compared cash to oxygen, saying it must remain available "because you do not know what will happen."

Despite the broader selling pattern, Berkshire's Q2 2026 activity included a major purchase of Alphabet shares. AOL.com reports that approximately $17 billion went into Alphabet, accounting for the lion's share of the quarter's buying. Ascendants.in adds that Buffett said he was personally responsible for those purchases and that Alphabet was trading at roughly 16.8 times forward earnings, compared with about 19.9 times for the S&P 500. According to Ascendants.in, Alphabet carried the lowest forward price-to-earnings multiple among the Magnificent Seven companies cited in the analysis. This selective purchase illustrates that Buffett's caution reflects a demand for attractive valuations rather than a blanket retreat from equities.

According to Ascendants.in, historical data attributed to Robert Shiller and YCharts shows that following CAPE readings above 40, the S&P 500 averaged a return of negative 3% after one year, negative 19% after two years, and negative 30% after three years. The same source notes that even the best three-year outcome in the sample was negative 10%. Separately, the Hartford Courant reports that Connecticut's unemployment rate has risen to 5.2%, tying for the nation's highest, while the stock market booms — illustrating the economic divergence that compounds concerns about sustainability. The Courant quotes CBIA CEO Chris DiPentima describing a "slow hire, slow fire" environment rather than mass layoffs.

The Motley Fool emphasizes that Buffett has never claimed to predict market crashes and would be "the first to tell you that he didn't predict any of those challenging periods in advance." Ascendants.in similarly notes that the material examined does not establish that Buffett has forecast an imminent crash. Instead, both sources describe a philosophy centered on maintaining liquidity and demanding more from the price paid for businesses. The Motley Fool reports Buffett's principle to "be fearful when others are greedy and be greedy when others are fearful," while Ascendants.in frames cash as "the capacity to invest" rather than the investment itself. Even now, The Motley Fool notes, Buffett is finding a few good opportunities to deploy capital.