Keith Speights, The Motley Fool
5 min read
Warren Buffett is no longer a net seller of stocks. For 14 consecutive quarters, he sold more shares of companies than he bought for Berkshire Hathaway‘s (NYSE:BRKA) (NYSE:BRKB) portfolio. In the second quarter of 2026, though, Buffett and new CEO Greg Abel used some of Berkshire’s enormous cash stockpile to invest heavily in stocks.
Does this mean that Buffett views the stock market as attractive? Not at all. A few weeks ago, he spoke with CNBC’s Becky Quick. That interview underscored Buffett’s view that it’s wise to be cautious about investing in stocks in the current environment — and history shows he’s probably right.
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Buffett’s 10-word warning
Quick directly asked Buffett about today’s market dynamics. He replied, “It’s tough to find value when everybody is preferring gambling.”
Buffett likes to buy stocks. He’d rather Berkshire’s massive cash position be lower, and its total equity position be higher. Before comparing investors to gamblers in his July CNBC interview, Buffett told Quick, “I think there are times when opportunities are just thrown at you so fast you can’t, you know, it’s unbelievable.” However, like his mentor Benjamin Graham, Buffett remains a value investor at heart. Based on his comments, he doesn’t see many bargains available.
But is his 10-word response really a warning to investors? I think so. His choice of words is important.
Perhaps the most striking word in Buffett’s response to Quick was “gambling.” The legendary investor has used the term several times in the past. For example, he used a gambling reference in speaking about the stock market in April 2022. Within two months, the S&P 500 was in a correction.
Why Buffett is right
Even the famed “Oracle of Omaha” can be wrong, though. Buffett had readily admitted to making mistakes in the past. But history suggests that his 10-word warning was probably right.
The valuation metric that bears Buffett’s name — the Buffett indicator — measures the ratio of total stock market capitalization to gross domestic product (GDP). This ratio currently stands at nearly 238%, its highest level ever. In 2001, Buffett stated in a Fortune magazine article that investors were “playing with fire” if the metric approached 200%.
