Warren Buffett's $382 Billion Warning Will Ring True for Wall Street Even After He Retires in Less Than 6 Weeks

One of the most illustrious investing careers on Wall Street is officially in its twilight. Billionaire Warren Buffett is set to step down from his role as CEO of Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) when the calendar changes to 2026, ending a 60-year run where he presided over day-to-day operations and what's currently a $309 billion investment portfolio.

Berkshire's shareholders will be sad to see the Oracle of Omaha leave due to his phenomenal investing track record. He's nearly doubled the average annual return of the S&P 500, including dividends, over the last six decades.

But professional and everyday investors will miss him, too. Buffett has always been upfront about his investing philosophy and candid regarding the traits that make businesses great.

While Berkshire's billionaire boss would never bet against America or the U.S. stock market, his actions sometimes speak louder than his words.

Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.

Warren Buffett's $382 billion warning to Wall Street has hit a deafening roar

Lengthy books have been written outlining the characteristics and traits the Oracle of Omaha looks for when taking a stake in a public company. Examples include sustainable moats, trusted management teams, and businesses that offer hearty capital-return programs (dividends and/or share buybacks).

Once in a while, Buffett will bend one of his unwritten rules. For example, he piled into gaming company Activision Blizzard in 2022 as an arbitrage opportunity. Microsoft had made a $95-per-share all-cash offer to acquire Activision, and shares of the company were trading well below this buyout price, primarily due to antitrust concerns. Despite being an advocate for long-term investing, Berkshire's chief made a short-term wager in this instance.

However, one aspect of Buffett's investment philosophy that remains unbreakable is his desire to get a good deal. Nothing is more important than stock valuations -- and Buffett's trading activity shows it.

In each of the last 12 quarters (Oct. 1, 2022 – Sept. 30, 2025), Berkshire Hathaway's consolidated cash flow statements show that Warren Buffett has sold more stock than he's purchased, to the cumulative tune of $184 billion. Selling this much stock, coupled with the cash flow generated from Berkshire's owned assets, has boosted the company's combined cash, cash equivalents, and U.S. Treasuries to approximately $382 billion, as of the end of September.

Although Buffett isn't the type to stoke fear in the investing community, his persistent selling and now-$382 billion treasure chest unequivocally signal his displeasure with valuations on Wall Street.

Warren Buffett Indicator hits a new all-time high of 223%, the most expensive stock market valuation in history 🚨🚨 pic.twitter.com/p14CI3VXGu

-- Barchart (@Barchart) October 26, 2025

If there was any doubt that stocks are pricey, the famed Buffett indicator can quell these skeptics. The Buffett indicator divides the aggregate market cap of all publicly traded companies in the U.S. by the country's gross domestic product (GDP). The lower the ratio, the "cheaper" stocks are presumed to be.

When back-tested to 1970, this valuation tool, which Buffett referred to as "probably the best single measure of where valuations stand at any given moment" in an interview with Fortune magazine in 2001, has averaged a reading of 85%. To put this into perspective, the market value of all public companies has averaged 85% of U.S. GDP over 55 years. In late October, the Buffett indicator surged above 225%, marking an all-time high.

Warren Buffett's actions clearly indicate that value is incredibly difficult to come by at the moment. Although he is finding small pockets of value -- he's purchased shares of fast-food favorite Domino's Pizza for five consecutive quarters -- multiple potential bubbles, including artificial intelligence, quantum computing, and Bitcoin treasury companies, have made stock valuations unappealing.

Image source: Getty Images.

Patience has worked wonders for the Oracle of Omaha

Considering that investing Berkshire's cash has been the source of the company's long-term outperformance of the S&P 500, investors are probably none-too-thrilled with this wait-and-see approach currently being exercised by the Oracle of Omaha. However, being patient and maintaining a long-term perspective have been the keys to Buffett's success as CEO of Berkshire Hathaway.

Berkshire's soon-to-be-retiring boss is well aware of the nonlinear nature of economic and stock market cycles and has planned his sizable investments accordingly throughout his tenure.

No amount of fiscal or monetary policy maneuvering can prevent recessions and economic slowdowns from occasionally taking place. On the other hand, the average recession since the end of World War II has endured roughly 10 months. This compares to the typical economic expansion, which lasts for about five years. Packing Berkshire Hathaway's investment portfolio with cyclical businesses has positioned Buffett's company to capitalize on the disproportionate nature of economic cycles.

Bull and bear markets on Wall Street demonstrate this same disparity.

According to a data set from the analysts at Bespoke Investment Group, the average S&P 500 bear market between the start of the Great Depression in September 1929 and June 2023 is just 286 calendar days, or roughly 9.5 months. In comparison, the average S&P 500 bull market has endured 3.5 times as long (1,011 calendar days).

Knowing that time is on Berkshire Hathaway's side, Warren Buffett has been willing to sit on his proverbial hands and wait for price dislocations to appear before pouncing. This patience allowed Buffett to secure a $5 billion investment in Bank of America shortly after the financial crisis in August 2011.

Although Buffett is unlikely to be the one who eventually deploys a good portion of Berkshire Hathaway's $382 billion treasure chest -- he's retiring as CEO in less than six weeks -- incoming CEO Greg Abel has vowed to keep the long-term ethos that Buffett championed firmly in place. When the next short-lived panic or bear market does arrive, Berkshire Hathaway will be there as an anchor of optimism for long-term-minded investors.

Bank of America is an advertising partner of Motley Fool Money. Sean Williams has positions in Bank of America. The Motley Fool has positions in and recommends Berkshire Hathaway, Bitcoin, Domino's Pizza, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.