Warren Buffett may be bracing for turbulence in the stock market, unloading shares now and preparing to scoop them up at a discount once valuations come back to earth, according to Paul Dietrich, chief investment strategist at Wedbush.
The legendary investor, known as the “Oracle of Omaha,” has been quietly reshaping Berkshire Hathaway’s portfolio in ways that suggest caution and possibly preparation for the next major downturn.
Buffett’s Stock Sales Reach Historic Levels
For 11 straight quarters, Berkshire Hathaway has been a net seller of equities, even as Wall Street’s rally has pushed markets to record highs.
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The conglomerate sold $212 billion worth of shares while purchasing just $34.5 billion, Dietrich told local press.
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That leaves net disposals of about $177 billion more than the market capitalization of major corporations such as BlackRock or Boeing.
In addition, Berkshire has paused its own stock buybacks for four consecutive quarters. That marks a sharp pivot from the pandemic years of 2020 and 2021, when Buffett spent over $20 billion annually repurchasing Berkshire stock, viewing it as undervalued.
The result is a cash pile of $344 billion, a record amount that has more than tripled in the past three years.
A Familiar Playbook: Build Cash Before Crashes
Dietrich points out that this isn’t the first time Buffett has prepared for a storm.
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Ahead of the dot-com crash, Berkshire boosted its cash from $11 billion in 1997 to $35 billion in 1998 while ramping up stock sales in 1999 and 2000.
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Before the 2008 financial crisis, Buffett grew Berkshire’s cash to over $70 billion. When markets collapsed, he deployed billions to secure deals with Goldman Sachs, General Electric, and other firms investments that paid off handsomely.
The pattern is clear: Buffett sells when valuations stretch, builds cash reserves, then strikes opportunistically when fear grips the market.
Valuations Flash Red
At Berkshire’s annual meeting in May 2025, Buffett lamented the lack of bargains. “It’s hard to find anything that makes sense right now,” he said, shortly before shocking shareholders by announcing he would step down as CEO at the end of the year.
Dietrich believes Buffett is particularly wary of the so-called Buffett Indicator a ratio comparing the total value of the U.S. stock market to GDP. The gauge now exceeds 210%, far above its historical averages.
Buffett himself has previously warned that buying stocks at levels approaching 200% is “playing with fire.”
Preparing to “Be Greedy When Others Are Fearful”
If history is any guide, Buffett’s caution now could turn into aggressive buying later.
“Buffett will eventually use his record cash pile to buy back Apple and the other shares he has sold but at a major discount after today’s nosebleed valuations come back down to earth,” Dietrich said.
The billionaire’s strategy echoes his most famous maxim: “Be fearful when others are greedy, and be greedy when others are fearful.”
The Big Question
With Buffett nearing the end of his career and passing the reins at Berkshire, investors are left wondering:
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Is Buffett signaling a coming correction that most of Wall Street is ignoring?
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Or is he simply leaving his successor with a safer, cash-heavy portfolio to navigate uncertainty?
Either way, history suggests Buffett is unlikely to let a crisis go to waste.
