Buffett Warns of $184 Billion Stock Market Decline in 2026
Written by Emily J. Thompson, Senior Investment Analyst
Source: Fool
- Buffett's Warning: Buffett's warning in September 2025 indicates that Berkshire Hathaway has been a net seller of $184 billion in stocks over the past 12 quarters, despite holding $382 billion in cash and short-term investments, suggesting a scarcity of buying opportunities that could lead to a market decline in 2026.
- High Market Valuation: As of December, the S&P 500's cyclically adjusted price-to-earnings (CAPE) ratio reached 39.4, the highest since 2000, with historical data showing an average return of -4% in the following year, indicating potential downward pressure on the market.
- Historical Performance Analysis: The S&P 500 has never increased in the three years following a CAPE above 39, with an average decline of 30%, heightening concerns about future market performance and necessitating cautious investor strategies.
- Investment Strategy Adjustment: While Buffett's warning does not imply a complete stock sell-off, it suggests that investors should review their portfolios and consider selling stocks they would not want to hold through a market downturn to mitigate potential risks.
Analyst Views on BRK.A
Wall Street analysts forecast BRK.A stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BRK.A is USD with a low forecast of USD and a high forecast of USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
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Current: 752000.000
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Current: 752000.000
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About BRK.A
Berkshire Hathaway Inc. and its subsidiaries are engaged in diverse business activities, including insurance and reinsurance, utilities and energy, freight rail transportation, manufacturing, services and retailing. Its segments include Insurance, Burlington Northern Santa Fe (BNSF), Berkshire Hathaway Energy (BHE), Pilot Travel Centers (Pilot), Manufacturing, McLane Company (McLane), and Service and retailing. The Insurance segment includes GEICO, Berkshire Hathaway Primary Group, and Berkshire Hathaway Reinsurance Group. The BNSF segment includes the operation of railroad systems in North America. BHE segment offers regulated electric and gas utilities and real estate brokerage activities. Manufacturing segment manufacturers various products, such as industrial, consumer and building products. The McLane segment is engaged in wholesale distribution of groceries and non-food items. The Pilot segment is an operator of travel centers in North America and a marketer of wholesale fuel.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
