- Warren Buffett warned about the overvalued stock market.
- While Wall Street analysts scratched their heads, S&P 500 bulls ridiculed him. A longtime Berkshire shareholder jumped ship.
- Buffett was right about the stock market all along. They don’t call him “The Oracle of Omaha” for nothing.
Now that the stock market is crashing, Warren Buffett has been vindicated for holding his epicly bearish $128 billion pile of cash. He warned investors stock market valuations were sky high in both word and deed. Who feels stung with buyer’s remorse for ignoring the guy they literally call “the Oracle” now that the stock market bubble is unraveling?
Who Bets Against Warren Buffett?
Last Fall Business Insider ran with the incredible headline:
Warren Buffett has a $128 billion cash pile. Wall Street can’t figure out why he isn’t spending it.
Really? After everything Buffett has said for decades? The business and investing legend has never been unclear about the reasons why he invests the way he does. He hasn’t changed at all over the decades. There is no secret. There are no gimmicks. His approach to markets has always been grounded in a stubbornly sober outlook and common sense.
In that November article, Insider reported the words of a team of UBS analysts led by Brian Meredith in a note to investors:
We remain surprised that the company has not been more aggressive with share repurchase.
That day Berkshire Hathaway stock (NYSE:BRK.A) was trading for $331,500. Today it can be had for less than $302,000. Analysts warn we haven’t reached the bottom of this free falling stock market correction. Looks like he was right to hold on to his cash.
Buffett Critics Eat Crow
In October a longtime Berkshire Hathaway shareholder dumped his multi-million stake in Warren Buffett’s holding company. David Rolfe at Wedgewood Partners then publicly scorned Buffett and Charlie Munger for not pumping their money into the S&P 500 bubble. He said they were sucking their thumbs…