Buffett's 10-Word Warning: Investors Are "Gambling," Not Investing

Warren Buffett told CNBC's Becky Quick on July 15 that "It's tough to find values when everybody is preferring gambling," drawing a line between investing in businesses and speculating on rising prices.
Two valuation measures back his caution. The Buffett indicator, which measures total U.S. stock market capitalization against GDP, sits near 238%, the highest level on record, while the S&P 500's Shiller CAPE ratio is above 41, a level reached only once before, near the 1999-2000 tech bubble peak. Buffett warned in 2001 that investors were taking excessive risk once the indicator neared 200%.
Despite the warning, Berkshire Hathaway resumed buying stocks in the second quarter of 2026 after 14 consecutive quarters as a net seller, concentrating purchases in Alphabet. Buffett said he personally led the Alphabet buys, which traded at about 16.8 times forward earnings versus roughly 19.9 times for the S&P 500, the lowest multiple among the Magnificent Seven.