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Buffett's $177 Billion Stock Selloff Warns of Overvalued Market
4 Aug
Summary
- Buffett has sold $177.431 billion more in stocks than he's purchased since Oct. 2022
- Market-cap-to-GDP ratio hit an all-time high of 210% in late July 2025
- S&P 500's Shiller P/E Ratio reached 38.97 in late July 2025, the third-priciest in history
According to Berkshire Hathaway's latest quarterly results, Warren Buffett has been actively selling stocks over the past 11 quarters (33 months). During the second quarter of 2025, Buffett oversaw $3.006 billion more in stock sales than purchases, continuing a trend that has seen him sell $177.431 billion more in stocks than he's purchased since October 2022.
This unmistakable and deafening warning to Wall Street comes as the stock market appears to be significantly overvalued. The market-cap-to-GDP ratio, often referred to as the "Buffett Indicator," hit an all-time high of over 210% in late July 2025, far exceeding its historical average of 85% since 1970. Additionally, the S&P 500's Shiller price-to-earnings (P/E) ratio, which accounts for a decade of earnings history, reached a closing value of 38.97 in late July, making this the third-priciest continuous bull market in history.
Despite having a near-record amount of cash at Berkshire Hathaway's disposal, Buffett has been patient, waiting for the right opportunities to deploy capital. The Oracle of Omaha's investment strategy has historically paid off handsomely for his shareholders, and he appears to be taking a cautious approach in the face of the market's lofty valuations.
