This year marks a new era for trillion-dollar conglomerate Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB). For the first time in well over half a century, billionaire Warren Buffett isn’t running the show. The Oracle of Omaha stepped down as CEO on Dec. 31, handing the reins to his longtime understudy, Greg Abel.

Abel has some big shoes to fill, with Buffett overseeing a nearly 6,100,000% return in Berkshire’s Class A shares (BRKA) over six decades. This compares to the S&P 500‘s (SNPINDEX: ^GSPC) total return, including dividends, of around 46,000% over the same timeline.

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On Saturday, May 2, Wall Street and investors got their first look at what an Abel-led Berkshire Hathaway might entail. Perhaps unsurprisingly, the company’s first-quarter operating results showed that Abel is perpetuating Buffett’s deafening warning to Wall Street.

Buffett and Abel have been net sellers of stocks for 14 consecutive quarters

In many respects, Buffett and Abel are cut from the same cloth. They both favor investing in companies with competitive advantages, experienced management teams, and robust capital-return programs. But above all else, they’re both unwavering when it comes to value and getting a good deal.

Berkshire’s consolidated cash flow statement shows that Abel was a net seller of equities during the March-ended quarter. This marks the 14th consecutive quarter (Oct. 1, 2022 – March 31, 2026) that Berkshire Hathaway’s lead investor has been a net seller of stocks:

Collectively, Berkshire’s bosses have sold approximately $194.8 billion more in stock than they’ve purchased over the last 3.5 years — and there’s a clear (and worrisome) reason why this pattern is continuing.

A historically pricey stock market foreshadows trouble for equities

Regardless of how much Buffett or Abel appreciates a company’s sustainable edge, management team, or capital-return program, nothing matters more than getting perceived value. For years, finding bargains on Wall Street has become challenging.

In a 2001 interview with Fortune magazine, Buffett referred to the market-cap-to-GDP ratio as “probably the best single measure of where valuations stand at any given moment.” This ratio has since become known as the Buffett indicator.

Since 1970, the aggregate value of all U.S. public companies divided by U.S. gross domestic product (GDP) is 0.88, or 88%. As of April 30, the Buffett indicator hit an all-time high of 226.8%.

It’s a similar story for the S&P 500’s Shiller Price-to-Earnings (P/E) Ratio, which is also known as the Cyclically Adjusted P/E Ratio (CAPE Ratio). Over the last 155 years, the Shiller P/E has averaged a little over 17. It ended the May 1 trading session above 41! The only time the CAPE Ratio has been higher is in the months leading up to the dot-com bubble bursting.

When the Shiller P/E tops 30, history shows it’s been (eventually) followed by declines of at least 20% in the benchmark S&P 500. Warren Buffett’s and Greg Abel’s persistent net selling portend trouble for a historically pricey stock market.

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Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.

Warren Buffett’s Successor, Greg Abel, Just Perpetuated the Oracle of Omaha’s $195 Billion Warning to Wall Street — and It’s Terrible News for Stocks was originally published by The Motley Fool