Warren Buffett and Greg Abel just sent shockwaves through Wall Street with this $377 billion warning

It has been a year of immense change for Berkshire Hathaway (BRKA -0.01%)(BRKB -0.25%) and its shareholders. Late last year, longtime CEO Warren Buffett outperformed the benchmark S&P500 (^GSPC +0.31%) of more than 6,000,000%, retired. That paved the way for his understudy, Greg Abel, to take charge of the company’s day-to-day operations and oversight of its $359 billion investment portfolio.

Although the trillion-dollar conglomerate built by the Oracle of Omaha has a new leader, the message, good and bad, remains the same. While Berkshire’s portfolio remains highly concentrated and long-term focused, Warren Buffett and Greg Abel just sent shockwaves through Wall Street with a $377 billion warning.

Warren Buffett and his successor, Greg Abel, have been net sellers of stocks in 15 of the last 16 quarters. Image source: Getty Images.

Buffett and Abel sent not-so-subtle warnings to Wall Street and investors

Earlier today, on November 7, Berkshire Hathaway released its third quarter operating results, which featured an operating profit of $12.7 billion and a significant increase in share repurchases.

But Berkshire’s operating results contain a number that Wall Street and investors can no longer ignore. The company’s cash position, consisting of cash, cash equivalents and U.S. Treasury bills, reached $377.4 billion.

Berkshire Hathaway now has a staggering $365 billion in cash, enough to buy 472 S&P 500 companies 🚨 🤑 https://t.co/D3tR2PV45p

– Bar Chart (@Barchart) November 6, 2026

Usually, a well-funded balance sheet would be viewed favorably by the investment community. But given that Buffett built Berkshire Hathaway into the company that is worth trillions of dollars today through acquisitions and investments, $377.4 billion in cash and earning interest is not a welcome sign. Wall Street has become accustomed to seeing Berkshire bosses put this capital to good use.

Additionally, Berkshire’s consolidated cash flow statement for the third quarter shows that $426 million more in equity securities were sold than purchased. For the 15th time in the last 16 quarters (four years), Buffett or Abel were net sellers.

Image source: Getty Images.

Finding value in a historically expensive stock market has been a challenge

While Warren Buffett has bent or broken many of his unwritten investing rules over several decades, the one rule he and his successor, Greg Abel, refuse to break concerns value. Both absolutely embrace the need for a good deal, and today’s stock market is all about finding a good deal. incredibly stimulating.

In a rare 2001 interview with Fortune magazine, Buffett has lifted the veil on his favorite valuation tool, the market capitalization-to-GDP ratio, now affably known as the Buffett Indicator. He called the metric “probably the best measure of where valuations stand at any given time.”

When backtested through December 1970, the Buffett Indicator averaged about 89%. This means that the total value of U.S. stocks represents on average 89% of U.S. gross domestic product (GDP). In August, the Buffett Indicator reached an all-time high of 236.42% and remains GOOD above its historical average.

Stock Market Hits Most Expensive Valuation in History After Warren Buffett Indicator Hits 239%, Surpassing Dotcom Bubble, Global Financial Crisis and 2022 Bear Market 🤯 👀 https://t.co/K5LBAN6S2Q

— Bar Chart (@Barchart) August 15, 2026

It’s no coincidence that the Oracle of Omaha was a net seller of stocks for 13 consecutive quarters before his retirement, or that Abel has been a net seller in two of the three quarters since he took the reins.

History shows that premium valuations are not sustainable in the long term. While it’s impossible to predict precisely when stock market declines will begin, history tends to rhyme with Wall Street, at least when it comes to outsized valuations.

Suffice it to say, Buffett and Abel’s warnings to Wall Street are reaching deafening levels.