Warren Buffett Says the 2026 Pullback Wasn't Big Enough to Move Berkshire's Cash

When the S&P 500 fell by 9% earlier this year, Warren Buffett didn't flinch. Many radical assumed that, since banal prices had fallen, Buffett would instrumentality vantage of a fewer worth opportunities.

He did not. In fact, the erstwhile president of Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) didn't adjacent look peculiarly moved by the pullback.

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In an interrogation earlier this year, Buffett said of the U.S. banal market: "Three times since I've taken implicit Berkshire, it's gone down much than 50%. This is nothing."

Buffett sees nary worth successful U.S. stocks

The accusation is clear. Stocks mightiness person been little than they were compared to their highs a mates of months earlier. But they were inactive precise costly connected a semipermanent basis, and Buffett wasn't going to budge until stocks got overmuch cheaper.

Berkshire ended first-quarter 2026 with astir $400 cardinal successful currency and Treasury bills connected the books. To the mean investor, this mightiness beryllium viewed arsenic an unnecessary currency resistance connected a portfolio. But Buffett has consistently favored patience implicit emotion. When the clip is right, he'll person the adust powder. Now, helium says, is not the clip to usage it.

The S&P 500 is presently trading astatine a guardant price-to-earnings (P/E) ratio of 21. That's down rather a spot from its peak, acknowledgment to the large net roar the S&P 500 has enjoyed from artificial quality development. But that's not the metric that Buffett pays adjacent attraction to.

The Buffett indicator hits a caller grounds

The Buffett indicator isn't called the Buffett indicator for nothing. This measure, which compares the worth of firm equities to U.S. gross home product, is the 1 helium looks at. At astir 230% currently, it's successful unprecedented territory and intelligibly not the benignant of level Buffett would beryllium looking to bargain at.

In the past, Buffett has said: "If the percent narration falls to the 70% oregon 80% area, buying stocks is apt to enactment precise good for you." Unfortunately, it hasn't been determination since the fallout from the fiscal crisis. He besides said: "If the ratio approaches 200% arsenic it did successful 1999 and a portion of 2000, you are playing with fire."

Understanding that, it's beauteous casual to spot wherefore Buffett wasn't compelled to bash thing with Berkshire Hathaway's cash. His successor, Greg Abel, has a antithetic view. He's made important purchases connected Berkshire's behalf successful Alphabet recently that enactment Berkshire overmuch further into the AI ecosystem.