Warren Buffett Just Sent a Hidden Warning

Well, it's finally happened. Warren

Buffett is back and he just revealed his

latest trades in this Berkshire

Hathway's quarterly 13F filing. And

these trades give us a look into

Buffett's thoughts on the market going

into the end of the year. And these

trades echo a clear warning that Buffett

gave in the last Berkshire meeting about

the future of the US dollar. And it's

one that most investors are ignoring.

Fiscal policy is what scares me in the

United States. And that's the big thing

we worry about with the United States

currency. The natural course of

government is to is to make the currency

worth less.

So that warning about rising debt

levels, government spending, and high

valuations in the market back in May

2025, it wasn't just talk. Because when

you follow the money today, Buffett is

clearly positioning his portfolio for

something big. So let's look at these

trades and Buffett's playbook behind

them to understand how we can best

prepare as investors.

So, if we look at Buffett's trades this

quarter, Buffett continued to sell more

shares than he bought, trimming his top

position in Apple by 4.6 billion or 6%

and selling just over $1 billion in Bank

of America, continuing the trend of

reducing Bergkshire's exposure to the

financial sector. And both of these

stocks are traditionally very high

performers. So Buffett looks like he's

trying to pull money off the table here,

adding to the $134 billion in cash that

he already built up in 2024. And that

wasn't the only sale. Bergkshire also

completely exited their billiondoll

T-Mobile position and around half of

their Charter Communications position.

These sales are a big deal because this

marks the 11th straight quarter that

Bergkshire has been selling more stocks

than they've been buying and their cash

and treasuries pile is at its highest

level in 60 years of Berkshire history.

So Buffett is building up cash so that

he has dry powder when the opportunity

comes along and this matches what he was

saying in his 2025 letter. Often nothing

looks compelling. Very infrequently we

find ourselves kneede in opportunities.

So Buffett isn't seeing that many

opportunities in the market right now.

But Berkshire also purchased shares,

including these six companies, which as

we'll see in a second, look like a

strategic hedge against what Buffett

sees coming for the market. So let's

look at what those dangers are, and then

we'll get into the six stocks that

Buffett has been buying. Because when an

investor holds a lot of cash, it's

usually a bet on the market declining.

So Buffett has two big fears in the

market right now. First off, he's

worried that borrowing and hype is

inflating the market to unreasonable

levels. This chart shows that stocks

that have been bought using borrowed

money has been outpacing the growth of

the broader market over the past 30

years, meaning more and more of today's

market is built on debt. Now, I covered

this situation and Buffett's warning of

a loss decade in stocks in a previous

video, but it's not hard to see why

Buffett might think the market is

overvalued today. For example, in the AI

space, OpenAI CEO has called the AI

market a bubble, and those high

valuations extend into the market in

general. The S&P 500 is now 30% made up

of just seven stocks. But Buffett's

second big worry, which is going to

matter more in the long term, is the

growing amount of US government debt.

So, I did a whole video breaking this

down as well, but here is the short

version. Buffett warned that if the

government borrows too much money,

eventually they won't be able to pay it

back. So instead, they'll just print

more and more dollars, which will make

the dollar worth less. So in his words,

fiscal policy is what scares me in the

United States, and the natural course of

government is to make the currency worth

less. And we saw this quarter that these

weren't just off-hand comments.

Bergkshire's positioning is a direct

response to Buffett's fears about the

government messing with the currency. So

I'll link those two videos below for

anyone who wants to go deeper on those

warnings. But what I want to focus on

now is how Buffett is reacting with

actions, not words, to what he's seeing

in the market today because these stocks

lay out a playbook that we can use to

react to the danger that Buffett is

seeing. And we can learn as we see

Bergkshire's strategy play out in real

time. And Buffett's not the only one

sounding the alarm here. Ray Dalio

recently tweeted that the US government

debt would reach 55 to60 trillion in the

next decade. And it's only gotten this

far because of what Buffett calls the

US's special status. Basically, global

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long. And now back to Buffett's latest

trades and what they tell us about his

playbook going forward. So here is a

chart of Berkshire Hathway's entire

stock portfolio. So despite trimming

Apple and some banks, you'll see that

the top stocks still look familiar.

Apple, AMX, Bank of America, Coca-Cola.

But if we zoom in on just his most

recent buys, they all follow a very

similar pattern. So Berkshire opened

four brand new positions I want to cover

this quarter. Allegian, a security

products provider, home builder Dr.

Horton, Lamar Advertising, and Newcore,

a steel maker. He also added to his oil

and gas holdings with $450 million more

Chevron shares. And he started a

position in United Health Group. And

even though these are all different

industries and the stocks kind of seem

unrelated on the surface, they are all

in capitalintensive cash producing

businesses, which as we'll see in a

second is a direct response to the

warning that Buffett gave us several

months ago. So let's look at the

strategy here. Why is Buffett buying

these six stocks? And why now? Because

this isn't random. This is Buffett

showing us his playbook for the next

phase of the market. And we can learn a

lot more from it than just copying his

trades, especially because these 13F

filings can be delayed by up to 45 days.

So, what do all these stocks have in

common? Well, number one, they all have

tangible assets that will hold their

value in high inflation. Number two,

they all have strong cash flow. These

are all income machines. And number

three, they are cheap relative to the

overall market. So, let's look at that

in more detail because part of that is

just classic Buffett value investing,

buying stocks at a discount, but it's

also something more. It can also act as

a hedge against a falling dollar. So, a

lot of this rests on that first point,

tangible assets. You can measure this in

a company by looking at PP&E, which is

property, plant, and equipment. This is

the real stuff, the machines, buildings,

land, asset that holds value, even if

the dollar doesn't. So, why does that

matter? Well, if the dollar falls,

physical goods become more expensive to

replace. But if you already own them,

that means that they hold their value.

So, let's say inflation cuts the

dollar's value in half and you have a

really expensive piece of steel making

equipment. Well, now that just doubles

in cost to replace, but if you already

own it, its value just doubled without

you doing anything. So, as a hedge, the

bet makes sense as protection against

Buffett's worst case scenario where

rising government debt fuels rising

inflation. But not every trade

Bergkshire made fits that mold exactly.

Buffett also made a big contrarian trade

into a stock the market has been beating

down recently, putting $1.6 billion into

United Health Group, a stock that

Buffett has been quietly building up in

secret since around late 2024 in secret

to avoid spiking the stock price. But

while United Health may not be an

assetheavy business, Buffett bought it

at a very deep discount. It actually

spiked in price by 17% when his trades

were revealed. And like the other

stocks, it generates massive free cash

flow that it can use in a downturn. So

even exceptions follow the rules.

Safety, cash flow, and price discipline.

So okay, that's the logic behind the

trades. Let's look at some data to see

if this strategy actually works

historically and how well it might work

for us in a regular non-billionaire

investors portfolio. So this chart shows

how different industries have performed

during periods of inflation. You can see

that businesses with hard assets,

including coal, oil, steel, and

electrical equipment, outperform during

periods of very high inflation. And

here's a second study by a quant trading

firm. These are the guys who run

millions of simulations trying to find

any edge on the market. They found the

same thing. Real assets are one of the

most reliable ways to benefit from high

inflation. So, this all lines up with

Buffett's strategy of buying companies

with hard assets to protect against the

dollar. But wait, wait, wait, hold up.

This all assumes that we're going to see

high inflation in the short term. And

that is not something that everybody

agrees on. Fed Chairman Jerome Powell

has said again and again, the Fed will

not cut interest rates until inflation

is clearly under control because Fed

rate cuts can actually reignite high

inflation if they come too early. But

Goldman Sachs thinks that inflation is

actually cooling off and we actually

might see a rate cut as soon as

September. So there's a lot of differing

opinions on whether or not inflation

will cool off in the short term. But

Buffett has made his long-term stance

pretty clear. Paper money can see its

value evaporate if fiscal folly

prevails. And we've already come close

to the edge. He says US federal debt now

exceeds the entire GDP of the country

and it doesn't show any signs of slowing

down. So, like most things with

investing, it's not a guarantee. It's a

risk, but it's a risk we can prepare

for. So, let's look at Buffett strategy

as a whole and what we can do in our own

portfolios without just copying a

billionaire's trades. And if you found

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thing for the YouTube investing space.

At least that's the goal. But let's go

ahead and look at Buffett's strategy and

the three main pillars that he's using.

So number one is build cash and wait for

opportunities to appear. This isn't

panic and selling out. It's patience and

waiting for opportunities. Number two,

avoid overpriced growth. And number

three, lean into more asset heavy cash

flowing businesses that will do well in

high inflation. Not going all in on

these, but hedging against the risks in

a calm, disciplined way. But now, here's

what I'm going to be doing with my

portfolio based on all this research.

And then after that, I'll get to one

more story from Buffett that I think is

extremely valuable to investors in

today's market.

So, first off, I don't plan to sell all

my stocks, but I will lean more into

these capital heavy businesses. Not

100%. These are slower growing

long-term, but maybe 5 to 10% for now

and watch to see if inflation starts

kicking in. I also won't be selling my

stocks to build up cash because unlike

Buffett, I can build up my cash pile

from my income, setting some money aside

each month. That's actually one

advantage that you have over Buffett is

you can actually move the needle on your

cash by earning more income or saving

more money. The point is anything you

can do to build cash today will have

compounded effects in the future. But

Buffett left one more warning in the

form of a metaphor that I think

describes today's market extremely well.

So Buffett said this, "Capitalism in the

United States has succeeded like nothing

you've ever seen. But what it is is a

combination of this magnificent

cathedral which has produced an economy

like nothing the world's ever seen and

then it's got this massive casino

attached. So the cathedral is like real

business value and the casino is like

the stock market.

And in the casino everybody's having a

good time and there's lots of money

changing hands and everything, but the

cathedral is what got to make sure the

cathedral gets gets fed to. It's very

important that the United States in the

next hundred years make sure that the

cathedral is not overtaken by the

casino. Focus on real value. Ignore the

casino. And I'll be publishing more

videos on these 13F filings from famous

investors over the next few weeks. So

subscribe to stay tuned. And this video

is the best one to watch in the

meantime.