Who’s right?

The month of November has started, and the U.S. equity market continues to show incredible resilience. 16.6% YTD return, after correcting 20% on liberation day due to tariffs. Corporate earnings are coming out solid, albeit with plenty of help from buybacks, on the back of substantial debt issuance. Warren Buffett, however, doesn’t seem to like this market. The chart below shows his massive cash position, which is $384Bn, a signal that he doesn’t find companies with attractive valuations or buy. Interestingly, he doesn’t believe in market timing and advocates for time IN the markets and yet, he has a significant amount of dry powder ready to invest. In fact he has been selling over the last few months. The indicator that bears his name is signalling extreme readings, and he is acting accordingly. But the rest of the market seems to be all-in. Fund managers surveys signal cash at or near historical lows, and retails investors are max out in equities. Which one is right?

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