Warren Buffett Sends a Dire $134 Billion Warning to Wall Street.
Warren Buffett's recent capital allocation decisions are sending a dire warning to Wall Street, as Berkshire Hathaway sold $143 billion in stock in 2024 while purchasing only $9 billion, resulting in net sales of $134 billion. This unprecedented move is a stark contrast to the company's history, where it has typically been a net buyer of stocks. Buffett's emphasis on finding good businesses over cash-equivalent assets suggests that he struggled to find attractive investment opportunities last year.
- Berkshire Hathaway's track record as a net seller of stocks before weaker market years suggests that the current warning from Warren Buffett may not be unique, and investors should consider this precedent when evaluating the stock market in 2025.
- Given the history of successful returns following periods where Berkshire was a net seller, it is reasonable to question whether the market will follow suit in 2025, and if so, what potential implications this could have for investors.