Just saw Berkshire Hathaway's latest earnings report and honestly, the subtext here is pretty loud. Warren Buffett's final move before retirement was basically saying "we're sitting this one out" - and I mean sitting hard. The company dumped $187 billion in net stock sales over the last 13 quarters. That's not normal for a guy who built his entire empire on buying quality businesses.

Think about what that really means. Berkshire's got over $300 billion in cash just sitting there. They're still making selective buys - UnitedHealth, Alphabet, The New York Times - but they're selling way more than they're buying. When Warren Buffett stops finding things worth buying despite having a mountain of dry powder, that's a signal worth paying attention to.

The official reason? Valuations are stretched. The S&P 500 hit a CAPE ratio of 39.8 back in February. For context, that hasn't happened since the dot-com crash in 2000. And here's where it gets uncomfortable - history shows that whenever the S&P's monthly CAPE goes above 39, the market has averaged a 30% decline over the next three years. We're talking 4% down by next February, 20% down by 2028, 30% down by 2029 if the pattern holds.

Now, there's always the counterargument that AI could supercharge earnings growth and justify these prices. That's possible. But the fact that someone like Warren Buffett is essentially on the sidelines tells you he's not betting on that scenario playing out anytime soon.

The takeaway? If you're still buying aggressively at these levels, you should probably have a really good reason. Stick to stuff you'd be comfortable holding through a serious correction - companies with reasonable valuations and genuine growth catalysts. Everything else is just hoping the music doesn't stop.