Key Points
- Warren Buffett has purchased nearly $78 billion in Berkshire Hathaway stock since mid-2018, but has not made any purchases in the last three quarters.
- Buffett’s decision to refrain from buying back shares is rooted in valuation concerns, as Berkshire’s shares are currently trading at a premium of 60% to 80% above book value.
- As of July 22, the market-cap-to-GDP ratio, known as the “Buffett Indicator,” reached a record high of 212.23%, indicating significant overvaluation in the market.
Warren Buffett, CEO of Berkshire Hathaway (NYSE: BRK.A, BRK.B), has spent approximately $78 billion on stock repurchases since July 2018; however, he has not made any purchases in the most recent three quarters. This pause in buying is due to the company’s stock trading at a high premium relative to its book value, currently between 60% and 80%.
As of July 22, the “Buffett Indicator,” which compares the total market value of all public companies to U.S. GDP, hit a record high of 212.23%. These metrics suggest that significant overvaluation exists in the current market environment, aligning with Buffett’s strategy of holding off until valuations become more appealing.
