Is Warren Buffett Right About the Stock Market? Here's What Investors Should Know.

Actions speak louder than words. That's why investors have much to glean from Warren Buffett's latest moves, even though he hasn't clearly spelled out what he's thinking about the stock market these days.

If you combine his actions with his general advice about investing in the stock market, you can get a good idea about what you should be doing with your money in today's market.

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Selling and saving

It's easy to see how Buffett is approaching the market today. Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) is required to regularly update shareholders with quarterly reports and file a 13F with its trades, and the holding company has been a net seller of stocks for the past 10 quarters.

Berkshire Hathaway has also built up its cash reserves to its highest-ever levels, and that continues to rise to new highs. At the end of 2025's first quarter, the company had $346 billion in cash and U.S. Treasury bills.

Image source: The Motley Fool.

At the annual shareholder meeting in May, Buffett effectively said that he just doesn't see the right opportunities to spend the money, adding, "We'd spend $100 billion. I mean, those decisions are not tough to make, when something is offered that makes sense to us and that we understand and offers good value, and where we don't worry about losing." He explained that his team is "very, very, very opportunistic," and that opportunities don't come up "in an orderly fashion."

Buffett is in the business of waiting for the right opportunities, not trading for the sake of trading. "If you told me I had to invest $50 billion every year until we got down to $50 billion, that would be the dumbest thing in the world to invest in that manner," he said. That's a pretty clear assessment of why he's holding cash right now.

It's his job to be strategic about buying and selling, but Buffett also said he can understand an investor who will make a few good investments and hold on to them forever. That could be the right decision for many investors who don't have Buffett's day job.

Pools and pizza

Does that mean there aren't great opportunities out there? Not necessarily. Although Buffett has sold more than he's bought, he has still identified new stocks to buy. Some recent purchases include Pool Corp. and Domino's Pizza.

That might be surprising to many investors since these aren't the kinds of stocks that elicit a lot of hype. I'd wager many investors never heard of Pool Corp. before Buffett bought it. But it isn't surprising to Buffett followers who understand his investing philosophy. He loves to buy pieces of great businesses, which means they have some kind of moat, excellent management, and don't need to use a lot of money to make a lot of money.

There are many ways to have a moat, but he's described his favorite companies as having a global brand name that travels. Domino's easily falls into that, as the largest global pizza chain. Pool Corp. has more of a niche than Domino's, but it's also a global leader.

If you're looking for great stocks, you can find great candidates that fit your investing criteria even now. You might want to hold on to some cash and wait for opportunities, but you also need to be in the market to benefit from its long-term ascent.

If you're already in the market, you need to stay in the market and let your money compound over time, even through volatility. That's why it's important to have an emergency fund. You should also make sure you're well-diversified, with several long-term, Buffett-type winners that can shield your portfolio in challenging times.

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Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Domino's Pizza. The Motley Fool has a disclosure policy.