ominous

It’s the end of an era on Wall Street. In less than four months, Berkshire Hathaway‘s (BRK.A -1.26%) (BRK.B -1.40%) Warren Buffett will retire from the CEO role he’s held for six decades. During his 60 years at the helm, he’s overseen a roughly 6,140,000% cumulative gain in his company’s Class A shares (BRK.A), which compares quite favorably to the roughly 43,300% total return, including dividends, delivered by the benchmark S&P 500 (^GSPC -0.32%) over the same timeline.

The Oracle of Omaha’s outperformance has made him the most-followed money manager on Wall Street, with some investors riding his coattails to substantial long-term gains.

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

But the other factor — aside from market-crushing returns — investors have come to appreciate about Buffett is his willingness to share his thoughts and the company traits he looks for when taking stakes in wonderful businesses. Whether it’s Berkshire’s annual shareholder letter or the company’s yearly meeting, Buffett is no stranger to offering up nuggets of wisdom.

While books have been written about Warren Buffett’s investment ideals, four ominous words from Berkshire’s latest shareholder letter perfectly encapsulate why he’s such a phenomenal investor, and explain why his recent investment activity sends a clear warning to Wall Street.

Warren Buffett sends a $344 billion warning to Wall Street using just four words

Investors are likely aware of some of the Oracle of Omaha’s core principles. For example, Buffett prefers to buy stakes in companies with sustainable competitive advantages, strong management teams, and hearty capital return programs. He also looks at investments as multiyear or multidecade commitments, with eight stocks in Berkshire’s portfolio currently considered “indefinite” holdings.

But possibly the best investment advice Buffett has ever offered, which perfectly encapsulates the promise and peril of the stock market, was penned in Berkshire Hathaway’s latest annual shareholder letter. While discussing where his company has money allocated, Buffett proclaimed, “Often, nothing looks compelling.”

At his core, Berkshire’s billionaire boss is an unwavering value investor. Though there are some unwritten “Buffett rules” that sometimes get broken, such as investing for the short-term via an arbitrage opportunity, Berkshire’s head honcho isn’t willing to buy a stock if its valuation doesn’t make sense.

Warren Buffett Indicator hits 215%, the most expensive stock market valuation in history 👀 pic.twitter.com/kjnbGN67be

— Barchart (@Barchart) August 29, 2025

At the moment, stock valuations are historically expensive. Keeping in mind that valuation is subjective, the affably dubbed “Buffett Indicator” recently hit an all-time high. This valuation measure adds up the cumulative market cap of all public companies in the U.S. and divides this figure by U.S. gross domestic product (GDP).

The market cap-to-GDP ratio, which has averaged closer to 85% of U.S. GDP when back-tested to 1970, surpassed 214% in late August. In other words, finding value has been exceedingly difficult for Buffett and his team.

Beginning in October 2022, the Oracle of Omaha began selling more stock than he was purchasing. This net-selling activity has been ongoing for 11 consecutive quarters (Oct. 1, 2022 – June 30, 2025), totaling $177.4 billion in net stock sales. All the while, Berkshire Hathaway’s cash pile, which includes cash, cash equivalents, and U.S. Treasuries, has ballooned to a near-record $344.1 billion.

Despite sitting on $344 billion in capital, Buffett prefers to be a net-seller of stocks, and isn’t even buying shares of his own company any longer. It’s as direct a warning as Wall Street will get from Berkshire’s billionaire chief.

Image source: Getty Images.

Patience pays off handsomely in the stock market

Though Buffett’s ominous advice – “often, nothing looks compelling” — perfectly explains why he’s been more of a seller than a buyer amid a historically pricey stock market, it also provides a backdrop of how Berkshire’s boss has been able to deliver outsized returns spanning six decades.

Fundamentally, Warren Buffett is well aware that the U.S. economy and stock market have both expanded over the long run. Even though recessions and stock market corrections are normal and inevitable aspects of respective economic and stock market cycles, optimism prevails over long periods. This means being patient and waiting for price dislocations to become apparent is a winning and time-tested strategy — in case the nearly 6,140,000% aggregate return for Berkshire’s Class A shares didn’t give it away.

In August 2011, shortly after the worst of the financial crisis, the Oracle of Omaha engineered a $5 billion stake in Bank of America (BAC -1.29%) preferred stock. While Bank of America wasn’t desperate for cash, it wasn’t going to turn down the opportunity to shore up its balance sheet amid ongoing litigation and a still-uncertain loan portfolio.

When Buffett initially made this investment, Bank of America’s common stock was trading at a 62% discount to its book value. But in the summer of 2017, Berkshire exercised its warrants to purchase 700 million shares of BofA stock at $7.14 per share. This August 2011 price dislocation instantly netted Berkshire a $12 billion (unrealized) profit, which has since grown even larger.

Berkshire’s billionaire CEO recognized a price dislocation with Apple (AAPL -0.16%), as well, in early 2016. The maker of the beloved iPhone was trading at just 10 to 15 times forward-year earnings nine years ago, which is an inexpensive valuation for a company that had been consistently growing by high single digits to low double digits annually. Apple stock has jumped approximately tenfold since Buffett first entered the position, with artificial intelligence euphoria and the company’s rapidly growing services segment doing a lot of the heavy lifting.

Although it can be frustrating waiting for Warren Buffett and his top advisors to deploy Berkshire Hathaway’s treasure chest, being patient has paid off handsomely for decades. When price dislocations do become apparent in the future, Buffett or his successor Greg Abel will be ready to pounce.

For more than a century, the stock market has stood tall as the premier wealth creator, with stocks generating a higher average annual return than bonds, commodities, and real estate. But getting from Point A to B can often be an adventure.

Just five months ago, the unveiling of President Donald Trump’s tariff and trade policy sent the benchmark S&P 500 (^GSPC -0.64%), growth-fueled Nasdaq Composite (^IXIC -1.15%), and ageless Dow Jones Industrial Average (^DJI -0.20%) spiraling lower. The S&P 500 endured its fifth-steepest two-day percentage decline since 1950, while the Nasdaq Composite plummeted into its first bear market in three years.

However, sentiment on Wall Street can shift at the drop of a hat. Since President Trump announced a 90-day pause on higher “reciprocal tariffs” on April 9, the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average have been off to the races, with all three indexes achieving multiple record-closing highs.

But this euphoria may soon be coming to an end, if history has its say.

Image source: Getty Images.

The stock market has rarely been pricier than it is right now

To preface the following discussion, historical precedent can’t concretely guarantee what’s going to happen in the future. If there was a metric or correlative event that could guarantee directional moves in the stock market, every investor would be using it by now.

With this being said, the stock market is making history on the valuation front — and not in a good way.

Value tends to be a subjective term that varies from one individual to the next. What you consider to be expensive might be viewed as a bargain by another investor. This dynamic is one of the reasons the stock market can be so unpredictable.

When most investors “value” a stock, they turn to the time-tested price-to-earnings ratio (P/E), which is arrived at by dividing a company’s share price by its trailing-12-month earnings per share (EPS). The P/E is a quick and easy way to evaluate mature businesses, but it’s not without its faults. This traditional valuation measure doesn’t account for a company’s growth rate, and it can be rather useless during recessions and shock events (e.g., the pandemic).

When back-tested, arguably no valuation tool provides a more-encompassing, apples-to-apples comparison of stock valuations than the S&P 500’s Shiller P/E ratio, which is also referred to as the cyclically adjusted P/E ratio (CAPE ratio).

The Shiller P/E is based on average inflation-adjusted EPS over the trailing decade. This means short-lived recessions and shock events won’t skew valuation multiples.

S&P 500 Shiller CAPE Ratio data by YCharts.

With the S&P 500 crossing above 6,500 for the first time in its storied history on Aug. 28, the Shiller P/E ratio closed at 39.18, which is its high-water mark for the current S&P 500 bull market. There are only two other periods spanning 154 years when the Shiller P/E has been higher:

• During the first week of January 2022, the S&P 500’s Shiller P/E surpassed 40 by a few hundredths.
• In December 1999, the Shiller P/E hit its all-time high of 44.19.

Historical precedent comes into play when examining what has happened to stocks following these previous periods of premium valuations. The 2022 bear market wiped out a quarter of the S&P 500’s value and lopped off more than a third of the Nasdaq’s value.

Meanwhile, the dot-com bubble, which took shape just months after December 1999, saw the S&P 500 and Nasdaq Composite lose 49% and 78%, respectively, on a peak-to-trough basis.

In fact, any instance in which the S&P 500’s Shiller P/E ratio has surpassed and sustained 30 for a period of at least two months has been a harbinger of significant downside. The S&P 500, Dow Jones, and/or Nasdaq Composite lost between 20% and 89% of their value following the five previous occurrences of the Shiller P/E topping 30.

With the stock market closing in on its second-priciest valuation since January 1871, history couldn’t be clearer on what’s to eventually come.

Image source: Getty Images.

Widening the lens leads to a completely different outlook

But there’s a big difference in attempting to forecast short-term directional moves for Wall Street’s major stock indexes and widening the lens to look at the big picture. While the Shiller P/E has an immaculate track record of forecasting eventual bear market downturns, few (if any) asset classes have proved more resilient over multiple decades than stocks.

The nonlinearity of economic and stock market cycles is one of the most-powerful catalysts working in favor of long-term investors.

For example, approximately 80 years have passed since the end of World War II. Since September 1945, the U.S. has navigated its way through a dozen recessions. The average recession has endured just 10 months, and none of these 12 downturns stuck around for longer than 18 months.

On the other end of the spectrum, the typical period of economic growth has endured for about five years, with two expansions surpassing the 10-year mark. Short-lived downturns and extended periods of growth are favorable to corporate EPS expansion over time.

This disparity between optimism and pessimism is even more apparent in the stock market.

It’s official. A new bull market is confirmed.

The S&P 500 is now up 20% from its 10/12/22 closing low. The prior bear market saw the index fall 25.4% over 282 days.

Read more at https://t.co/H4p1RcpfIn. pic.twitter.com/tnRz1wdonp

— Bespoke (@bespokeinvest) June 8, 2023

In June 2023, the analysts at Bespoke Investment Group published a data set on X (formerly Twitter) that examined the calendar length of every bull and bear market in the S&P 500 dating back to the start of the Great Depression in 1929.

Bespoke found the average S&P 500 decline of 20% or greater lasted just 286 calendar days, or approximately 9.5 months. But over this nearly 94-year stretch, the typical bull market was sustained for 1,011 calendar days, or two years and nine months.

While it’s anyone’s guess what might happen to stocks a month, six months, or even a year from now, patience and perspective have proved invaluable to investors willing to look to the horizon. The S&P 500 has never been down over any rolling 20-year period, including dividends, which is a strong endorsement for the U.S. economy and stocks in the decades to come.

A commercial pilot has revealed why you’re asked to put your phone in airplane mode before takeoff – and it’s nothing to do with the plane crashing

The holiday season is back, and with it all the niggling hassles like squeezing into last summer’s shorts, digging out your forgotten passport, and sprucing up those toenails for sandal-worthy feet.

Once you’ve finally boarded your plane, you’re often met with a stark reminder from cabin crew to switch your mobile to airplane mode. Is it really plausible that one tiny device could threaten the integrity of a gargantuan jet?

This question has been addressed by aviation boffins, and indeed they suggest there’s a need for caution. Commercial aviator Perico Durán advises: “Smart people think that something could happen if we don’t activate airplane mode, so do it.”

Back when mobiles were becoming omnipresent, there was genuine concern regarding their potential to disrupt aircraft systems. Notably, in 2011, Boeing 737 cockpit displays were discovered to be vulnerable to mobile-induced interference.

Perico clarifies that while interference wouldn’t cause an engine failure or stop landing gears from deploying, it might lead to misreadings or untimely distractions: “What might happen is a false indication of something, a distraction at a specific moment.”

According to Perico, air travel regulations are formulated to preclude even the most minute hazards: “We tell people to activate flight mode to avoid distractions,” he asserts.

He emphasises the triviality of being disconnected briefly: “What difference does it make?” Perico remarked. “It’s only ten minutes from ten thousand to fourteen thousand feet. Put your phone in flight mode and avoid a distraction. Being without your mobile phone for ten minutes is nothing.”

A 2017 survey by Allianz Travel Insurance involving over 1,500 Americans revealed that 40% don’t always switch their phones to airplane mode, with nearly 14% admitting to sneaking texts or calls mid-flight.

In the US, adherence to the flight attendant’s advice is more stringent due to Federal regulations which state, “cellular telephones installed in or carried aboard airplanes, balloons, or any other type of aircraft must not be operated while such aircraft are airborne (not touching the ground). When any aircraft leaves the ground, all cellular telephones on board that aircraft must be turned off.”

However, European travel offers a more laid-back approach. With the introduction of 5G technology on airlines in 2023, EU passengers can now freely make and receive calls and texts during flights, thanks to EU 5G networks operating on different frequencies than American ones, thus not interfering with aircraft systems.

If you’re concerned about your mobile phone battery dying mid-flight, it’s perfectly acceptable to bring an external power bank in your carry-on luggage. However, they should not be packed in your checked luggage due to the lithium batteries they contain, which can occasionally ignite.

Should a battery fire break out in the passenger cabin, flight attendants can quickly identify and extinguish it before it causes significant damage. Conversely, if a fire starts in the cargo hold, it could become dangerously widespread before an alarm is triggered.

If crucial documents like your boarding pass are stored on your phone, having a backup battery is a wise move. While airline staff will likely assist if your phone does run out of juice during your journey, it’s always better to be prepared.