Warren Buffett cautions about expensive market but indicates opportunities for selective buys

From Nasdaq: 2024-10-26 03:15:00

The S&P 500 index has soared in a bull market, reaching new records on a 22% annual gain. Tech stocks in AI have surged, prompting questions about high valuations. Warren Buffett’s Berkshire Hathaway has outperformed the S&P 500, with recent moves signaling caution in an expensive market but also opportunities for select buys.

Buffett’s recent selling of Apple and Bank of America shares indicates a strategy to lock in profits amid rising capital gains tax rates. However, he also added to long-held positions and opened new ones, showing a selective approach to investing. His moves underscore the importance of careful stock selection in any market environment.

A key metric, the Shiller CAPE ratio, suggests stocks are expensive, with the ratio at levels seen only three times since the late 1950s. Buffett’s recent buying and selling reflect a focus on value and potential future gains. Despite a pricey market, opportunities for growth and value still exist for savvy investors.



Read more at Nasdaq: Should You Buy Stocks at a Record High? Here’s What Warren Buffett Is Doing.