What $340B Tells Us
In the 2026 annual letter, Buffett disclosed Berkshire's cash holdings have surpassed $340B — a figure that would rank among the S&P 500's largest market caps.
"The goal isn't to pile up cash. There simply aren't adequate opportunities."
Read that in reverse: the world's most famous value investor can't find attractive buying opportunities at current prices. This aligns with S&P 500 Shiller P/E ratios near historical highs.
The Apple Trim Lesson
Buffett reduced his Apple stake by roughly 30% in 2025. "Apple is a wonderful business, but the price has become equally wonderful."
This single sentence captures the essence of value investing. Business quality and investment attractiveness are separate questions. A decent company at 10x forward P/E may be a better investment than a great company at 30x.
Opportunities Exist Even in Expensive Markets
Interestingly, an expensive overall market doesn't mean every stock is overpriced. Within the S&P 500 itself, dividend stocks exist that have fallen as much as 55% from their highs. Where turnarounds are becoming visible, valuation appeal remains alive.
Simultaneously, some software stocks have seen valuations compress to "no-brainer" levels. Buffett's skepticism about the broad market doesn't eliminate individual opportunities.
Investment Implications
- Time to review your cash allocation — patience is also a strategy
- Build the habit of distinguishing between "great companies" and "great prices"
- Even when overall market valuations are elevated, individual stock-level opportunities exist