Warren Buffett’s Warning to Wall Street Reached Deafening Proportions in 2024. Here’s What to Do as 2025 Gets Started.
Warren Buffett has demonstrated his understanding of the market over the long term — and his ability to turn that knowledge into wise investing decisions. As chairman of Berkshire Hathaway, he helped deliver a compounded annual gain of more than 19% over the past 58 years — largely beating the S&P 500, which has posted a 10% such increase over that time period. Buffett has become so good at navigating the stock market that he’s often referred to as the “Oracle of Omaha.”
This long-term investing success has prompted investors to flock to the investing giant for clues about what may be next for the stock market and how to prepare for it. It’s important to keep in mind that Buffett’s words and actions don’t always follow the path of the majority. This top investor doesn’t mind going against the crowd. For example, in Buffett’s shareholder letter following the 2000 market crash, he wrote: “Last year, we commented on the exuberance — and, yes, it was irrational — that prevailed, noting that investor expectations had grown to be several multiples of probable returns.”
Now let’s consider Buffett’s actions in 2024. In the first three quarters of the year, as the S&P 500 soared, he took steps that could be seen as a warning to Wall Street. Berkshire Hathaway reached a record cash level of more than $300 billion, or 28% of its asset value. That’s the highest percentage in more than 30 years. On top of this, Buffett has been a net seller of stocks for several quarters, and has even decreased his positions in certain favorite holdings such as Apple.
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