Billionaire Warren Buffett Just Said 5 Words That Confirmed Wall Street's Deepest Fears

As billionaire Warren Buffett has aged, his public appearances have understandably become less common. Now that Buffett is no longer CEO of Berkshire Hathaway, I'd expect public appearances for the 95-year-old to become even more rare.

Recently, however, Buffett gave an interview to CNBC and offered several interesting insights into Berkshire's holdings. Investors always scrutinize what the Oracle of Omaha has to say, given his incredible track record.

Well, Buffett just said five words that may have confirmed Wall Street's deepest fears.

Buffett seems to view the market as overvalued

While speaking with CNBC's Becky Quick, Buffett discussed Berkshire's decade-long position in Apple, which, at one point, accounted for roughly 40% of Berkshire's huge equity portfolio.

Image source: Motley Fool.

In recent years, Berkshire has sold a significant portion of its Apple stake, prompting some investors to wonder whether the company is headed for a complete exit. New Berkshire CEO Greg Abel confirmed in a recent letter to shareholders that Berkshire plans to retain its current Apple position, which accounted for 23% of Berkshire's stock portfolio at the end of 2025.

Buffett confirmed, saying, "I'm very happy to have it be our largest holding." Buffett also added, "It's not impossible that Apple would get to a price, we would buy a lot of it," he added, "but not in this market."

It's these last five words, "but not in this market," that investors should pay attention to. In my mind, these five words confirm Wall Street's worst fears, which is that Buffett and Berkshire view the market as overvalued right now.

Now, this likely won't come as a huge shock to most investors who have followed Buffett and Berkshire over the past few years. Berkshire has been selling more stock than it's buying, has built an absolutely massive pile of cash and short-term bonds over $370 billion, and hasn't been repurchasing its own stock until very recently.

The writing was on the wall, but now Buffett appears to have said out loud what everyone was thinking. Other indicators that Buffett has historically watched and that other investors have also paid attention to have also suggested the market is overvalued. For instance, the Shiller CAPE (cyclically adjusted price-to-earnings) ratio, which compares the price of the S&P 500 index to the broader benchmark's 10-year inflation-adjusted average earnings, is well above its 10-year average.

S&P 500 Shiller CAPE Ratio data by YCharts. CAPE Ratio = cyclically adjusted price-to-earnings ratio.

The famous Buffett indicator, which looks at the Wilshire 5,000, which effectively includes all U.S. stocks, relative to U.S. gross domestic product (GDP), has also been at all-time highs for a while. The ratio recently hit 211%. Buffett typically considers the market to be overvalued when the Buffett indicator is over 100%, although it's worth noting that the Buffett indicator has not been below 100% since 2013.

What should investors do?

For investors who closely monitor Buffett and Berkshire, the findings above are nothing new. It's also possible that the market is simply in a new era of elevated valuations or still in the midst of a long bull market that can last even longer than many expect. However, they shouldn't rule out a significant correction at some point, either.

The Iran war has led the major indexes to briefly enter correction territory, but you could also argue that surging oil prices should have triggered a stronger sell-off.

At the end of the day, it's impossible to predict what the market will do in the near term. In such an uncertain environment, investors should listen to Buffett but also heed his advice of having a long-term mindset. Long-term investors will likely be able to ride out whatever happens to the market over the next year or two, as historical data suggests that the longer one holds stocks, the less likely they are to lose money.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway and is short shares of Apple. The Motley Fool has a disclosure policy.