Warren Buffett said investors are in a “gambling” mood, reviving a warning he delivered in May and again in a mid-July CNBC interview.
A 237% market-cap-to-GDP ratio — the Buffett indicator’s highest reading ever — and a surge in 0DTE options trading underpin his view that speculation now dominates stock picking.
Berkshire Hathaway’s response has been defensive: cash, equivalents and short-term Treasuries reached a record $397.4 billion as of March 31, while Buffett and successor Greg Abel keep hoarding liquidity.
The warning echoes April 2022, when Buffett and Charlie Munger likened the market to a gambling parlor before the S&P 500 later fell into correction and finished that year down 19%.
Valuations are even richer now: the S&P 500 Shiller CAPE has climbed above 41 from under 34 in April 2022, suggesting Buffett sees today’s risks as at least as stretched.