Warren Buffett has just released his most terrible warning on Wall Street. Could not be clearer

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Each quarterly investors are eagerly awaiting release Berksshire Hathaway’s (Nyse: mustache) (Nyse: mustache 13F submission. The Securities Commission (SEC) requires that most large funds reveal what the supplies they owned at the end of each quarter. This effectively enables the public to see what stocks buy and sell.

Many investors carefully accompany Berksshire Hathaway report because conglomerate is managed by no one else than Warren BuffettProbably the biggest investor ever. The ownership of Buffetta and Berkshire not only gives a view of which companies they love, but also how some of the biggest minds of investment are considering.

In Berksshire’s latest 13F, Buffett warned Wall Street a violent stock market warning. It could not be clearer.

There is no lack of investors who think the market is overrated. After all, we were on a bull market with two and more years and a wider scale S & P 500 recorded an annual return of more than 20%. Buffett seems to be one of those investors. In 2024. Buffett and Berksshire kept Gotovina and at the end of the third quarter had over $ 320 billion in cash and short -term treasury costs.

Berksshire too Sold more stocks than bought in 2024, including large pieces of some of his greatest positions like Apple and Bank of America. If you are an investor studying Buffett and Berksshire, you know that they have difficulty for recessions during and strong falls on the market. Some attribute this great time why Berksshire shares have demolished the stock market for decades.

In Berksshire’s recent 13F, Oracle from Omaha warned about Wall Street. Berksshire came out of two funds on the Stock Exchange (ETFS) that accompany the wider market: SPDR S & P 500 ETF (Nysemkt: Spy) AND Vanguard S & P 500 ETF (Nysemkt: Voo).

Now that someone sells supplies, it does not necessarily mean that the company is in a bad place. Maybe the insider needed money to buy a big purchase. However, in this scenario we know that Berkshire does not need money given a huge stock. It can no longer be clear that Buffett and the Berksshire team think the market has been overrated. Berksshire has bought both of these ETF at the end of 2019, and this is the first time he has changed any position in more than five years.

This is not too surprising, given that several indicators suggested that the market was either overrated or the economy could soon get into a recession. Several examples include the reverse yield curve and the Cape Shiller ratio, which compares the S&P 500 price with a 10-year average earnings adapted to inflation to smooth out irregularities. As you can see below, the Cape ratio trades above its five -year average and close to the highlights seen just before the market is intensely sold out in 2022 (from February 16).

S & P 500 Chart of Shiller Cape ratio

Cape ratio S & P 500 Shiller data Ycharts.

It is rare to see the cause of recession or falls on the market. This does not mean that there will be no similarities, but they are often dressed differently and difficult to discover them before it happens. History can offer traces that help investors prepare for the future, but history is not usually repeated exactly.

The market is in a very different place today than ever before. Congress flooded the economy with Gotovina after the beginning of the pandemic 2020; Several companies currently consume approximately a third of S&P 500; And technology has become involved in our daily lives as never before.

Accordingly, Buffett and Berksshire have been on the market since the 1960s, so they saw a lot of different cycles. Although the conditions are different, they could mask similar questions that led to the market fall. I would invite Buffett’s warning and avoid entering new positions if they trade in expensive estimates. You do not necessarily have to sell or change your entire portfolio if you have a long -term horizon of investment, but you should prepare for some volatility and perhaps correction, even if it is short -lived.

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Bank of America is an advertising partner Motley Fool Money. Bram Berkowitz There is no position in any of the shares mentioned. Motley Fool has positions and recommends Apple, Bank of America, Berksshire Hathaway and Vanguard S & P 500 ETF. Motley Fool has disclosure rules.

Warren Buffett has just released his most terrible warning on Wall Street. Could not be clearer originally published by Motley Fool

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