What Warren Buffett's Latest Portfolio Moves Say About the Market
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Buffett's recent actions tell us something extremely important about the market right now.Investors generally are unanimous about the following: Warren Buffett is an investor to watch during any market environment. This is because the billionaire has delivered a track record of success that spans nearly 60 years. As chairman and chief executive of Berkshire Hathaway, Buffett has helped generate a compounded annual gain of nearly 20%. This largely beats the S&P 500's 10% compounded increase over that time period. Buffett is now approaching retirement, with plans to hand over his CEO role to Greg Abel, currently the company's vice-chairman of non-insurance operations, at the end of the year. But this expert investor has remained active in his final months and quarters of leadership. And that means we can take a look at what Buffett's latest portfolio moves say about the market... Image source: The Motley Fool. Good news for Buffett fans First, though, here's some good news for all of you Buffett-watchers: Buffett still will be around as chairman, will go into the Berkshire Hathaway office to share ideas with the team, and he's promised to continue communications through an annual Thanksgiving message. So we may hear about Buffett's thoughts on key subjects well into the future. Now, let's consider Buffett's general investment strategy over time and the moves he's made in recent quarters. Buffett is known for choosing quality companies with solid competitive advantages, or moats, and investing in them for the long term. The billionaire won't jump into the latest trend even if everyone else is doing so -- and even if it's delivering big returns fast. Buffett prefers companies he can count on over time, and this strategy has been a successful one. ExpandSNPINDEX: ^GSPCS&P 500 IndexToday's Change(0.67%) $46.17Current Price$6886.68Key Data PointsMarket Cap$0BDay's Range$6824.69 - $6900.6752wk Range$4835.04 - $6920.34Volume3.5BAvg Vol0Gross Margin0.00%Dividend YieldN/A One extremely important point is that Buffett favors value stocks, meaning he aims to buy stocks trading for less than what they truly are worth. The idea is that the rest of the investment community eventually will recognize the strengths of these particular companies and buy the shares -- and these stocks then will rise.Advertisement So, what has Buffett been doing lately? The billionaire's moves have been very clear: Over the past 12 quarters, he's been a net seller of stocks, and he's built up Berkshire Hathaway's cash position to reach record levels. BRK.B Cash and Short Term Investments (Quarterly) data by YCharts Meanwhile, in his 2024 letter to shareholders, Buffett wrote that it's rare to be "knee-deep" in buying opportunities. Buffett's moves suggest one thing... This, along with Buffett's focus on value, says something very clear about the market today -- and a key market metric supports this. The S&P 500 Shiller CAPE ratio, a view of stock price in relation to earnings over 10 years, recently reached beyond 39, a level it's only surpassed once before. S&P 500 Shiller CAPE Ratio data by YCharts Buffett's actions, supported by this valuation metric, suggest the stock market is expensive and has been so for a while. But, before you make any abrupt investing decisions based on this, it's important to take a deeper look into Buffett's moves. The Oracle of Omaha, as he's often called, hasn't stopped investing. He's still found opportunities -- for example, he picked up shares of UnitedHealth Group in the second quarter and shares of Alphabet in the third quarter. Both of these stocks were inexpensive at the time, and they continue to be reasonably priced. This shows us that, even if the overall stock market is pricey, investors still may find interesting opportunities. UNH PE Ratio (Forward) data by YCharts Now, looking specifically at the Alphabet purchase, we can draw an additional conclusion. Though technology and artificial intelligence (AI) stocks have climbed over the past few years, this doesn't mean that every AI player is expensive. It's important to consider each company individually -- if you don't, you might miss out on a deal today that may become a winner down the road. So, Buffett's moves over the past several quarters -- from his selling activity to his accumulation of cash -- suggest that today's market is expensive. And the Shiller CAPE ratio confirms this. But Buffett doesn't recommend staying away. Instead, his investing principles ring true in any market environment, including today's: Look for value, and when you find it, buy and hold for the long term.About the AuthorAdria Cimino is a contributing Motley Fool stock market analyst covering healthcare, technology, and consumer goods sectors. Prior to The Motley Fool, Adria covered the European stock market and U.S. stocks pre-market trading for Bloomberg News, Bloomberg TV, and Bloomberg Radio for more than a decade. Earlier in her career, she wrote about biotech, medtech, and technology companies in Boston for Mass High Tech, an American City Business Journals publication. She holds a bachelor’s degree in mass communications from the University of South Florida.TMFAdriaCiminoX@adria_in_parisRead NextDec 9, 2025 •By Trevor JennewineStock Market Investors May Get Bad News From the Federal Reserve This WeekDec 9, 2025 •By Sean WilliamsWill the S&P 500 Fall Below 5,000 in 2026? 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