Warren Buffett Keeps Selling Stocks, Builds Record $381 Billion Cash Stash. Is a Market Crash Imminent?

"Legendary investor Warren Buffett has been steadily unloading stocks at Berkshire Hathaway )( ) while amassing a massive cash reserve, sparking questions about a potential market crash. If the Oracle of Omaha is selling and stashing cash, should we be buying? In the third quarter, Berkshire's cash holdings ballooned to a record $381.7 billion, even as U.S. markets hit new highs. This cautious stance comes as Buffett, now 95, prepares to step down as CEO at year's end, handing the reins to Greg Abel."

"But does this really signal an impending market crash? Analysts are divided, viewing it as a mix of prudence and missed opportunities in a rallying economy. Berkshire's latest earnings report underscores Buffett's conservative approach. For the 12th consecutive quarter, the conglomerate was a net seller of equities in its $312 billion portfolio, which still includes major stakes in ( ( AppleNASDAQ:AAPL) and American ExpressNYSE:AXP)."

"Buffett also didn't buy back any Berkshire stock for the fifth straight quarter, despite Berkshire's shares underperforming the broader market. The S&P 500 has surged ahead this year, leaving Berkshire's stock down 2% since Buffett announced his CEO exit in May and trailing the index by 12 percentage points for the full year. Still, why the hoarding? Buffett has long preached buying undervalued assets, but current valuations seem to appear too rich for his taste. The Oracle is not known for chasing valuations higher."

Berkshire Hathaway increased cash holdings to a record $381.7 billion in the third quarter while selling equities from its $312 billion portfolio. The conglomerate was a net seller of stocks for the 12th consecutive quarter and did not repurchase Berkshire shares for the fifth straight quarter. Major stakes remain in Apple and American Express. Berkshire's shares trailed the S&P 500, down 2% since Buffett announced his planned exit and behind the index by 12 percentage points year-to-date. Buffett's caution reflects a view that current market valuations are rich and readiness to deploy cash during downturns; analysts remain divided on the signal.

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