PanamaTimes

Sunday, Oct 25, 2026

Warren Buffett is sitting on $128 billion, raising questions about whether the market is overvalued

Warren Buffett is sitting on $128 billion, raising questions about whether the market is overvalued

Buffett's decision to walk away from a deal despite Berkshire's massive cash hoard may show there aren't that many reasonably priced opportunities.

The forward price-to-earnings ratio for the S&P 500 has climbed to levels last seen around December’s monster sell-off.

The S&P 500 is also trading at about 2.14 times sales estimates for the next 12 months.

The last time the market reached such a high price-sales multiple was in September 2018 when a big sell-off began and in the first quarter of 2000 just before the tech bubble burst.

Despite having $128 billion to burn, Warren Buffett just backed out of a bidding war after a slightly higher offer topped Berkshire Hathaway’s.

If the Oracle of Omaha is that shy to just spend a tad more of his giant cash pile, could that be saying something about the stock market’s overall valuation?

Last week, the Berkshire chairman and CEO bid $140 a share, or just over $5 billion, for Tech Data, a hot technology distributor, according to an exclusive report Friday from CNBC’s Becky Quick. Then private-equity giant Apollo Global Management then sweetened its initial bid to $145 a share, or $5.14 billion.


Buffett then bowed out.

Little is cheap in the market right now as stocks’ record run this year has driven multiples higher across the board and lifted most stocks.

“Prices are sky-high for businesses possessing decent long-term prospects,” Buffett said in the most recent annual letter. He has repeatedly said the premium for buying companies outright has gotten too rich for his liking partly due to competition from private-equity companies.

The S&P 500 is up 25% this year, on pace for its best annual performance since 2013. An impressive rally this quarter has pushed stocks to all-time highs amid optimism on a U.S.-China trade deal and receding fears of recession.


‘Almost unprecedented’

The forward price-to-earnings ratio for the S&P 500, the most common indicator for market valuation that measures current share price relative to per-share earnings estimates for the next 12 months, has climbed to levels last seen around December’s monster sell-off.

“U.S. equities remain highly overvalued relative to non-U.S. equities,” Lori Calvasina, head of U.S. equity strategy at RBC, said in a note Wednesday. “We aren’t looking for much multiple expansion in 2020.”

The S&P 500 is also trading at about 2.14 times sales estimates for the next 12 months. The only times the market reached such multiple was September 2018 when the sell-off began and in the first quarter of 2000 just before the tech bubble burst.

It is “not unprecedented but almost unprecedented,” Patrick Armstrong, chief investment officer at Plurimi Investments, said on CNBC’s “Worldwide Exchange” on Friday. “A multiple doesn’t cause a sell-off, but the more expanded a multiple gets the bigger drawdown happens with the sell-off.”

The elevated valuation is especially prevalent in tech as the P/E ratio for the sector has rebounded to the highest levels of the past 10 years, according to Bespoke Investment Group.

It begs the question, if Buffett isn’t willing to pay a premium, should you?

Newsletter

Related Articles

PanamaTimes
0:00
0:00
Close
Advertising trick: Pepsi’s Harrier Jet Commercial Led to a $700,000 Court Fight
Why 2027 Could Be a Strong Year for Stocks—and Why the Forecast Is Fragile
Trump’s Top General Seeks an Exit Strategy From Iran War, Report Says
Brock Lesnar Retires From Wrestling, Closing a Career of Rare Athletic Range and Lasting Controversy
Trump-Era Policy Shifts Test the Boundaries of U.S. Institutions
Weight-Loss Drug Boom Tests the Limits of Prescription Advertising Rules
Breaking With the Past: One of the World’s Smallest Countries Changes Its Name
AI Is Remaking the US Economy, From GDP Growth to iPhone Prices
Cuba’s Grid Fails Again as Fuel Crisis Deepens
Nazca Lines Flight Crash Kills Thirteen as Peru Suspends Aerodiana
OpenAI Faces Demands for Full Disclosure After Models Breach Hugging Face
FIFA’s Private-Investment Plan for World Cup Rights Draws European Revolt
Why Americans Queue for $15 Ice Cream and a $100 Caviar Pint
OpenAI Sued After ChatGPT Allegedly Discouraged Emergency Care Before Near-Fatal Embolism
Miliband Sets Climate and International Law at Centre of UK Diplomacy
Trump Readies New Tariffs as Temporary Global Levy Nears Expiry
Morgan Stanley Builds a Wall Street Lead in AI Infrastructure Finance
High Prices Push Coffee Drinkers Toward Whole Beans and Home Brewing
Spain Defeats Argentina in Extra Time to Win Second World Cup
Venezuela’s Earthquake Devastation Turns U.S. Investment Opportunity Into a Thirty-Seven Billion Dollar Reconstruction Challenge
Ukrainian Drones Strike Wildberries Warehouses Deep Inside Russia
The Ledger Will Not Trust on Faith
Trump Administration Pressures Banks to Restrict Financial Access for Undocumented Immigrants
The Ten World Cup Finals That Defined Football History
Smartphones Are Getting More Expensive, Sales Are Collapsing, and Even Apple Admits: "Prices Will Rise"
The AI Race Enters Its Infrastructure Era
Colombia Influencer Dies After Cosmetic Procedure at Unlicensed Bogota Salon
A Quiet Bastille Day: France Grapples with World Cup Heartbreak and Leftover Fireworks
Spain in Ecstasy: "We Feel Unbeatable, We Taught the Whole World a Lesson"
On the Island That Did Not Yield to Trump, There Is No Electricity, and 10 Million Live in Darkness
World Cup Visitors Turn American Big-Box Stores Into Souvenir Stops
Anthropic Reengineers Agentic Architecture to Shift Autonomous Workplace Automation to the Cloud
Global Crisis Alert: Escalating Middle East Tensions and UK Political Upheaval
Japanese Technology Firm Fujitsu Launches Advanced Artificial Intelligence Tool for Corporate Disclosures
South Africa Officially Launches Nationwide Campaign for Highly Contested Local Government Elections
United Kingdom Commits Additional Funding for Unexploded Ordnance Clearance in Laos
Singapore Announces Stringent New Greenhouse Gas Regulations for Commercial Cooling Systems
Cambodia and Thailand Hold High-Level Border Security Talks at United Nations Headquarters
Myanmar Military Government and China Sign Major Agreement to Upgrade Media and Cultural Cooperation
Knife Attack at Swiss Train Station Leaves Three Injured in Suspected Act of Domestic Terrorism
Transnational Extortion Gang Threatens Canadian Police With Army of One Thousand Armed Operatives
Australia Imposes Forty-Two-Day Quarantine on Cruise Ship Passengers Following Deadly Hantavirus Outbreak
International Monetary Fund Unlocks Seven Hundred Million United States Dollars for Sri Lanka Following Economic Reforms
Australia Launches Record One Point Four Billion Dollar Lawsuit Against Chemical Giant 3M Over Contamination
China and Canada Foreign Ministers Meet in Ottawa in Effort to Stabilize Strained Diplomatic Ties
Indonesia Demands Urgent United Nations Security Council Reform Amid Escalating Global Conflicts
Extreme Weather Patterns Trigger Severe Drought in Madagascar and Destructive Flooding in East Africa
Indian State of Karnataka Faces Political Upheaval as Chief Minister Siddaramaiah Abruptly Resigns
Philippines and Japan Reaffirm Defense Ties as Crucial for Indo-Pacific Regional Stability
Norway Joins French Nuclear Deterrence Initiative in Major Shift for European Security Architecture
×