Subject: Barrons, on Buffett,
Now We Know Why Warren Buffett Was Selling Stocks
Amid the stock market’s fourth quarter bullishness, a time featuring multiple record closes for the S&P 500, Berkshire Hathaway CEO Warren Buffett was busy selling stocks. Many market observers were scratching their heads, but the S&P 500’s 2025 slump makes the answer much clearer.

Since Berkshire’s latest investments disclosure in mid-February, the index is down 5% and has given up all the postelection gains it notched in the fourth quarter and then some. At the end of Tuesday’s trading, the index’s close was the lowest value since Nov. 4. It rebounded 1.1% on Wednesday.
While some money managers have criticized Buffett for being too conservative in his allocations in recent years, there were signs in the fourth quarter that market choppiness could be ahead. President Donald Trump made no secret of his plans to use tariffs liberally in his second term, for example.
The market dislikes uncertainty. Abrupt policymaking and chaotic news flow was a hallmark of the first Trump administration—expecting more of the same wouldn’t have been a stretch. But politics weren’t likely Buffett’s only reason. Inflation remained above the Federal Reserve’s 2% target last fall, threatening consumer spending.
Buffett’s biggest influence may have been valuations. With the market racing to new highs throughout the fourth quarter, stocks were getting ever more expensive relative to their own history and the rest of the world. They were effectively priced for nothing less than perfection, an anathema to a value investor.
What’s Next: If history is any guide, policies could change on a dime in this administration, which has previously always kept one eye on the stock market. And plenty of strategists still say the S&P 500 can bounce back to end the year well above 6,000—however long it may take to claw its way back up.

—Teresa Rivas