Warren Buffett, CEO of Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), sold close to $20 billion in equity securities during the first quarter of 2024, marking the sixth consecutive quarter of net-selling activity for the company. While precise details of Berkshire’s investment portfolio won’t be available until the company files its Form 13F later this week, Buffett’s actions suggest caution in the face of what he sees as a potentially overvalued market.

One of Berkshire’s largest sales was the disposal of approximately 115 million shares of tech giant Apple (NASDAQ: AAPL), which Buffett attributed to tax reasons during his annual Q&A with investors. The company’s cash pile has swelled to $189 billion as of the end of March, prompting Buffett to suggest that Berkshire’s war chest could reach $200 billion by the end of the current quarter.

Buffett’s reluctance to deploy capital in the current market environment echoes concerns over the elevated valuations of stocks. The Shiller price-to-earnings (P/E) ratio for the S&P 500 recently surpassed 30, a level historically associated with market corrections. Buffett’s track record of navigating economic downturns and market volatility suggests that investors should take heed of his cautionary stance.