It Has Begun: Warren Buffett Just Sounded the Alarm — Most Will Regret Ignoring It

You are in a bubble right now, Drew. The

AI bubble is going to burst.

>> Birkshshire Hathaway has the most cash

it ever has on hand. Is that like an

indicator that you know the most

successful investor is like, I'm going

to take a step back for a second.

>> He is sending you a signal that bad

things are going to happen to the stock

market in the short term. So, keep in

mind Warren Buffett's job is to yield an

annual return. He's got to think about

his shareholders. He is in every minute

detail of the stock market. And so you

will see over time he has pulled cash

out, put cash back in. The odds that

this is very similar to a 1999.com

bubble are extremely high. The catch is

you'd still make an unfathomable amount

of money if you just were diversified

across all the dot stocks in 1999, rode

out the bubble bursting and just let all

of it climb back up. And if you're a

dollarost averager, which I advise you

to be, then you would just be doing

that. Oh, look at everything's on

discount because over the last 200

years, 6.5% over inflation is what a

well diversified set of stocks has

yielded. I am not the person for day

traders to pay attention to. Go look at

all the quants and all those guys and if

you want to take that risk and you think

you're that smart, go for it. Yes,

Warren Buffett is telling you that

you're in for probably several years of

trauma and turmoil. But if you're

invested for 25 years, 50 years, 60

years, what does it matter? All of these

blips are going to come and go.

Understand the nature of the thing and

you will be fine. If you steer by

emotion, you are going to lose your

[ __ ] money. Warren Buffett is

stockpiling cash because he's not able

to find good investments or long-term

scale projects anymore.

>> Yep. I think right now that is a very

reasonable thing for somebody that has

to yield an annual return for

shareholders for sure. Now, just keep in

mind he has done this before. This might

be the time where he's done it. It's 20%

bigger than he's ever done it. But he's

done this many times before where he

doesn't think there's any deals in the

market. He sees instability here, there

somewhere. Just be careful. If you're

not Warren Buffett and you are not

spending every day reading shareholder

reports and all of that stuff, the odds

that you're able to do what he does and

get the returns that he's going to get

are zero. Far better to play the game

that's worked for 200 years for the

average person, which is just stay in

the market. Don't put money in there

that you need to touch in the next 25

years. Don't put your grocery money

there. Make sure that you have plenty of

money in cash. I keep years of money in

cash on hand because hey, who knows?

Now, I'm When you take it at a raw

dollar amount, the amount that I lose in

potential upside on having years worth

of cash at my lifestyle is a lot. But I

do it so that I don't have to worry. If

the economy went into a multi-year

recession, I I wouldn't even have to

think about it. but it gives me plenty

of time to react. So, I'm just saying I

think it is wise to put yourself in that

kind of position.

>> Buffett used to say that he never sells,

but now he's sold and holding cash. This

is a different behavior. Big signal to

everyone else that is being ignored.

>> Yep. Whenever somebody makes a

statement, myself included, what they

are saying is right now with the way

things are and the things that I know

now, this makes sense. But if you try to

pull something that he might have said

20 years ago and apply it to today, that

doesn't make any sense. He's not trying

to be dogmatic. He's trying to get a

return for shareholders. Once you

understand that, the man has to get an

annual return for shareholders. I don't

care how good of an investor you are.

You start doing three, four years of not

sufficient returns, especially when

other people are getting bigger returns,

people in your community are going to

turn against you. If you live in an

inflationary environment, you must find

a way to beat the punishing effects of

that inflation. If the stock market just

absolutely gets obliterated and banks

are folding, guess what they're going to

do? They're going to print more money.

And so if you have all of your money in

cash, you are [ __ ] There's no other

way to say it. Your money will literally

go to zero. Very bad things can happen.

And the thing that separates people is,

do you own assets or not? And you should

be mad as hell that you're being forced

to gamble in the stock market. But you

have to gamble because the reaction to

every bad thing in the market is going

to be to print money. When you really

just get to the raw mechanism of how

this works and why unfortunately

everybody is forced to gamble in the

stock market, you will understand like

black markets spring up for a reason. If

you really hyperinflate a currency, the

following would be brilliant. You buy a

whole bunch of freezers cuz now at least

your money is in a freezer and it's not

like the freezer has the value that the

freezer has. and then you go to the

grocery store and you buy a bunch of

things that you can freeze and then you

sell it to people and you change the

price every hour. That would be a

brilliant use of capital. What isn't a

brilliant use of capital is leaving it

in the bank is investing in assets when

you need the money right now. These are

all terrible [ __ ] ideas. If we

actually hyperinflate the US dollar, my

advice to people is not going to be,

hey, keep dollar cost averaging into the

stock market. It's going to be like,

okay, what can you do right now to make

sure that your family can eat? Buffett

is in a different place. He's going to

react differently because a he's got

asymmetric knowledge. He's also he's

like 170. So he's going to have a

different lens on life. He's already

trying to pass the baton to the next

person. So it's like all of that is

going to influence. It is a data point.

It is a data point to read. Well, it is

a data point that tells me the stock

market is not going to be a great place

to be in the short term.

>> We've got a counterargument. Tom, you're

missing the biggest piece. The yield

curve inversion. Buffett pulling

billions and asset prices at inflated

highs. These aren't random. They're the

classic setup for a crash. You say

invest in assets, but doing that before

what could be the worst crash in 90

years would be unreoverable. The yield

curve, Buffett's moves, and inflated

highs all point to one thing, a reset.

If what you are saying is you are better

off keeping your money in cash, staying

out of the stock market, waiting for it

to basically go to zero, you're calling

it a reset. all the companies washing

out and then we build back and so just

wait and see if that happens. Cool. We

have registered your advice. It is

[ __ ] terrible advice. My advice is

very simple. Don't put money into the

stock market that you need back in less

than 10 years for sure. Probably 25 is

the right way to think about it. If that

happens, money printer go burr so hard

so fast you will hyperinflate the

currency. It will be the death of

America as we know it. So, I don't know

what you're actually advising people to

do. Live below your means. You must be

in assets in an inflationary

environment. Don't put money in that you

need right away. Make sure that you

always have cash on hand. Be nimble

enough that if things really do go to

hell in a hand basket that you have a

plan. If America shows signs of collapse

like that, I'm on the first private

private flight to Abu Dhabi. It just is.

I'm going to Singapore. I'm going where

it's warm and no mosquitoes at like

that. Just there it is. If you think

this is all going to reset, guess where

the worst place in the known universe

would be? Cash.