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Globe and Mail
13-05-2025
- Business
- Globe and Mail
The Smartest High-Yield Dividend Stocks in Warren Buffett's "Secret Portfolio" to Buy Right Now
Warren Buffett's secret is out of the bag. He's stepping down as CEO of Berkshire Hathaway at the end of the year. However, the legendary investor has another secret that many don't know about: a portfolio of stocks that doesn't appear on Berkshire's regulatory filings. Berkshire Hathaway acquired General Re in 1998, which had bought New England Asset Management (NEAM) three years earlier. This deal gave Buffett a "secret portfolio" often overlooked by investors. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » But if you're seeking great income opportunities, you can find plenty among NEAM's holdings. Some of the stocks offer exceptionally juicy dividends. Here are the smartest high-yield dividend stocks in Buffett's "secret portfolio" to buy right now. 1. Ares Capital NEAM owns 225,900 shares of Ares Capital (NASDAQ: ARCC), giving Buffett an indirect stake in the largest publicly traded business development company (BDC). Savvy income investors know that BDCs often provide attractive dividend yields because the companies must return at least 90% of their earnings to shareholders as dividends to be exempt from federal income taxes. I think Ares Capital has the best dividend program in the BDC industry. Its forward dividend yield is an ultra-high 9.12%. Ares has paid stable or increasing dividends for 63 consecutive quarters. The company has also delivered the highest base dividend growth over the last 10 years of any externally managed BDC with a market cap of over $700 million. Ares Capital could even appeal to investors who aren't primarily focused on income. Since its initial public offering in 2004, the stock has delivered a 70% greater cumulative total return than the S&P 500 and an average annual total return of 13%. With the Federal Reserve concerned about stagflation, could Ares Capital's business suffer over the near term? Maybe. However, CEO Kort Schnabel believes his company could increase its market share in direct lending. BDCs such as Ares Capital could also be more attractive to middle-market businesses as banks reduce their risk exposure. 2. Duke Energy Utility stocks tend to be great safe havens for investors during turbulent periods. Buffett's "secret portfolio" owns several solid utility stocks. I think Duke Energy (NYSE: DUK) is the best of the bunch. The company provides electricity to 8.6 million customers in North Carolina, South Carolina, Florida, Indiana, Kentucky, and Ohio. It also operates natural gas utilities that serve 1.7 million customers in the Carolinas, Kentucky, Ohio, and Tennessee. Most income investors will probably like Duke Energy's forward dividend yield of 3.47%. I suspect they'll also love the company's dividend track record. Duke has paid a dividend for 99 consecutive years. The company has increased its dividend every year since 2007. While the Trump administration's tariffs are a major concern for many U.S. companies, they present only a minor issue for Duke Energy. CFO Brian Savoy said in the company's first-quarter earnings call that tariffs should impact only 1% to 3% of Duke's five-year capital plan. He added, "And we are confident in our ability to further minimize the impact, leveraging our size and scale to work with suppliers across our diverse supply chain." Duke Energy is also poised to deliver solid growth on top of its juicy dividends. The company projects long-term earnings-per-share growth of 5% to 7%. The Carolinas and Florida rank among the top U.S. states in population growth. Duke should benefit from data center and manufacturing facility construction as well. 3. Verizon Communications Berkshire Hathaway has invested in Verizon Communications (NYSE: VZ) in the past, but no longer has a direct stake in the telecommunications giant. However, Buffett still owns shares of Verizon thanks to NEAM's portfolio. The "Oracle of Omaha" might be thankful for that continued position in Verizon. The telecom company's shares have jumped roughly 9% year to date while the major market indexes floundered. This success is a direct result of Verizon's solid quarterly updates in 2025. Verizon remains a favorite for income investors with its forward dividend yield of 6.21%. The company has increased its dividend for 18 consecutive years. Management ranks supporting and growing the dividend as one of its top capital allocation priorities. Even stronger growth could be on the way for Verizon. The company hopes to close its pending acquisition of Frontier Communications in early 2026. This deal will expand Verizon's fiber footprint and help the company in offering new services related to artificial intelligence (AI) and the Internet of Things. Should you invest $1,000 in Ares Capital right now? Before you buy stock in Ares Capital, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ares Capital wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $614,911!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $714,958!* Now, it's worth noting Stock Advisor 's total average return is907% — a market-crushing outperformance compared to163%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 12, 2025
Yahoo
13-05-2025
- Business
- Yahoo
The Smartest High-Yield Dividend Stocks in Warren Buffett's "Secret Portfolio" to Buy Right Now
Ares Capital offers an ultrahigh dividend yield and a history of delivering market-beating total returns. Duke Energy is a safe haven with solid growth opportunities. Verizon Communications has increased its dividend for 18 consecutive years. 10 stocks we like better than Ares Capital › Warren Buffett's secret is out of the bag. He's stepping down as CEO of Berkshire Hathaway at the end of the year. However, the legendary investor has another secret that many don't know about: a portfolio of stocks that doesn't appear on Berkshire's regulatory filings. Berkshire Hathaway acquired General Re in 1998, which had bought New England Asset Management (NEAM) three years earlier. This deal gave Buffett a "secret portfolio" often overlooked by investors. But if you're seeking great income opportunities, you can find plenty among NEAM's holdings. Some of the stocks offer exceptionally juicy dividends. Here are the smartest high-yield dividend stocks in Buffett's "secret portfolio" to buy right now. NEAM owns 225,900 shares of Ares Capital (NASDAQ: ARCC), giving Buffett an indirect stake in the largest publicly traded business development company (BDC). Savvy income investors know that BDCs often provide attractive dividend yields because the companies must return at least 90% of their earnings to shareholders as dividends to be exempt from federal income taxes. I think Ares Capital has the best dividend program in the BDC industry. Its forward dividend yield is an ultra-high 9.12%. Ares has paid stable or increasing dividends for 63 consecutive quarters. The company has also delivered the highest base dividend growth over the last 10 years of any externally managed BDC with a market cap of over $700 million. Ares Capital could even appeal to investors who aren't primarily focused on income. Since its initial public offering in 2004, the stock has delivered a 70% greater cumulative total return than the S&P 500 and an average annual total return of 13%. With the Federal Reserve concerned about stagflation, could Ares Capital's business suffer over the near term? Maybe. However, CEO Kort Schnabel believes his company could increase its market share in direct lending. BDCs such as Ares Capital could also be more attractive to middle-market businesses as banks reduce their risk exposure. Utility stocks tend to be great safe havens for investors during turbulent periods. Buffett's "secret portfolio" owns several solid utility stocks. I think Duke Energy (NYSE: DUK) is the best of the bunch. The company provides electricity to 8.6 million customers in North Carolina, South Carolina, Florida, Indiana, Kentucky, and Ohio. It also operates natural gas utilities that serve 1.7 million customers in the Carolinas, Kentucky, Ohio, and Tennessee. Most income investors will probably like Duke Energy's forward dividend yield of 3.47%. I suspect they'll also love the company's dividend track record. Duke has paid a dividend for 99 consecutive years. The company has increased its dividend every year since 2007. While the Trump administration's tariffs are a major concern for many U.S. companies, they present only a minor issue for Duke Energy. CFO Brian Savoy said in the company's first-quarter earnings call that tariffs should impact only 1% to 3% of Duke's five-year capital plan. He added, "And we are confident in our ability to further minimize the impact, leveraging our size and scale to work with suppliers across our diverse supply chain." Duke Energy is also poised to deliver solid growth on top of its juicy dividends. The company projects long-term earnings-per-share growth of 5% to 7%. The Carolinas and Florida rank among the top U.S. states in population growth. Duke should benefit from data center and manufacturing facility construction as well. Berkshire Hathaway has invested in Verizon Communications (NYSE: VZ) in the past, but no longer has a direct stake in the telecommunications giant. However, Buffett still owns shares of Verizon thanks to NEAM's portfolio. The "Oracle of Omaha" might be thankful for that continued position in Verizon. The telecom company's shares have jumped roughly 9% year to date while the major market indexes floundered. This success is a direct result of Verizon's solid quarterly updates in 2025. Verizon remains a favorite for income investors with its forward dividend yield of 6.21%. The company has increased its dividend for 18 consecutive years. Management ranks supporting and growing the dividend as one of its top capital allocation priorities. Even stronger growth could be on the way for Verizon. The company hopes to close its pending acquisition of Frontier Communications in early 2026. This deal will expand Verizon's fiber footprint and help the company in offering new services related to artificial intelligence (AI) and the Internet of Things. Before you buy stock in Ares Capital, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Ares Capital wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $614,911!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $714,958!* Now, it's worth noting Stock Advisor's total average return is 907% — a market-crushing outperformance compared to 163% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 12, 2025 Keith Speights has positions in Ares Capital, Berkshire Hathaway, and Verizon Communications. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool recommends Duke Energy and Verizon Communications. The Motley Fool has a disclosure policy. The Smartest High-Yield Dividend Stocks in Warren Buffett's "Secret Portfolio" to Buy Right Now was originally published by The Motley Fool
Yahoo
13-05-2025
- Business
- Yahoo
The Smartest High-Yield Dividend Stocks in Warren Buffett's "Secret Portfolio" to Buy Right Now
Ares Capital offers an ultrahigh dividend yield and a history of delivering market-beating total returns. Duke Energy is a safe haven with solid growth opportunities. Verizon Communications has increased its dividend for 18 consecutive years. 10 stocks we like better than Ares Capital › Warren Buffett's secret is out of the bag. He's stepping down as CEO of Berkshire Hathaway at the end of the year. However, the legendary investor has another secret that many don't know about: a portfolio of stocks that doesn't appear on Berkshire's regulatory filings. Berkshire Hathaway acquired General Re in 1998, which had bought New England Asset Management (NEAM) three years earlier. This deal gave Buffett a "secret portfolio" often overlooked by investors. But if you're seeking great income opportunities, you can find plenty among NEAM's holdings. Some of the stocks offer exceptionally juicy dividends. Here are the smartest high-yield dividend stocks in Buffett's "secret portfolio" to buy right now. NEAM owns 225,900 shares of Ares Capital (NASDAQ: ARCC), giving Buffett an indirect stake in the largest publicly traded business development company (BDC). Savvy income investors know that BDCs often provide attractive dividend yields because the companies must return at least 90% of their earnings to shareholders as dividends to be exempt from federal income taxes. I think Ares Capital has the best dividend program in the BDC industry. Its forward dividend yield is an ultra-high 9.12%. Ares has paid stable or increasing dividends for 63 consecutive quarters. The company has also delivered the highest base dividend growth over the last 10 years of any externally managed BDC with a market cap of over $700 million. Ares Capital could even appeal to investors who aren't primarily focused on income. Since its initial public offering in 2004, the stock has delivered a 70% greater cumulative total return than the S&P 500 and an average annual total return of 13%. With the Federal Reserve concerned about stagflation, could Ares Capital's business suffer over the near term? Maybe. However, CEO Kort Schnabel believes his company could increase its market share in direct lending. BDCs such as Ares Capital could also be more attractive to middle-market businesses as banks reduce their risk exposure. Utility stocks tend to be great safe havens for investors during turbulent periods. Buffett's "secret portfolio" owns several solid utility stocks. I think Duke Energy (NYSE: DUK) is the best of the bunch. The company provides electricity to 8.6 million customers in North Carolina, South Carolina, Florida, Indiana, Kentucky, and Ohio. It also operates natural gas utilities that serve 1.7 million customers in the Carolinas, Kentucky, Ohio, and Tennessee. Most income investors will probably like Duke Energy's forward dividend yield of 3.47%. I suspect they'll also love the company's dividend track record. Duke has paid a dividend for 99 consecutive years. The company has increased its dividend every year since 2007. While the Trump administration's tariffs are a major concern for many U.S. companies, they present only a minor issue for Duke Energy. CFO Brian Savoy said in the company's first-quarter earnings call that tariffs should impact only 1% to 3% of Duke's five-year capital plan. He added, "And we are confident in our ability to further minimize the impact, leveraging our size and scale to work with suppliers across our diverse supply chain." Duke Energy is also poised to deliver solid growth on top of its juicy dividends. The company projects long-term earnings-per-share growth of 5% to 7%. The Carolinas and Florida rank among the top U.S. states in population growth. Duke should benefit from data center and manufacturing facility construction as well. Berkshire Hathaway has invested in Verizon Communications (NYSE: VZ) in the past, but no longer has a direct stake in the telecommunications giant. However, Buffett still owns shares of Verizon thanks to NEAM's portfolio. The "Oracle of Omaha" might be thankful for that continued position in Verizon. The telecom company's shares have jumped roughly 9% year to date while the major market indexes floundered. This success is a direct result of Verizon's solid quarterly updates in 2025. Verizon remains a favorite for income investors with its forward dividend yield of 6.21%. The company has increased its dividend for 18 consecutive years. Management ranks supporting and growing the dividend as one of its top capital allocation priorities. Even stronger growth could be on the way for Verizon. The company hopes to close its pending acquisition of Frontier Communications in early 2026. This deal will expand Verizon's fiber footprint and help the company in offering new services related to artificial intelligence (AI) and the Internet of Things. Before you buy stock in Ares Capital, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Ares Capital wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $614,911!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $714,958!* Now, it's worth noting Stock Advisor's total average return is 907% — a market-crushing outperformance compared to 163% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 12, 2025 Keith Speights has positions in Ares Capital, Berkshire Hathaway, and Verizon Communications. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool recommends Duke Energy and Verizon Communications. The Motley Fool has a disclosure policy. The Smartest High-Yield Dividend Stocks in Warren Buffett's "Secret Portfolio" to Buy Right Now was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
07-03-2025
- Business
- Yahoo
News Flash: Warren Buffett's "Secret" Portfolio Has Sold Nearly 90% of Its Invested Assets in 2 Years
One of the best aspects of putting your money to work on Wall Street is that it's freer and fairer than ever. Most brokerages have eliminated minimum deposit requirements and commission fees associated with common stock trades on major U.S. exchanges. Additionally, investors have access to income statements, balance sheets, investor presentations, and a host of economic data at the click of a button. One of the most important data releases each quarter occurred just three weeks ago – and I'm not talking about any specific earnings report or the monthly inflation report. Feb. 14 marked the deadline for institutional investors with at least $100 million in assets under management to file Form 13F with the Securities and Exchange Commission. A 13F provides a snapshot that allows investors to see which stocks Wall Street's leading money managers purchased and sold in the latest quarter (in this case, the December-ended quarter). While there are dozens of asset managers that make waves on Wall Street, no money manager garners attention quite like Berkshire Hathaway's (NYSE: BRK.A)(NYSE: BRK.B) billionaire CEO, Warren Buffett. The appropriately named "Oracle of Omaha" is overseeing a 44-stock, $294 billion portfolio at Berkshire, which is highly concentrated into a few of his best ideas. But what you might not realize is that Berkshire Hathaway's quarterly 13F doesn't tell the complete story about what's under the hood. Although Berkshire Hathaway has made in the neighborhood of five dozen acquisitions with Warren Buffett at the helm, one in particular stands out. In 1998, Berkshire acquired reinsurance company General Re in an all-share deal valued at $22 billion. While the purpose of this deal was to incorporate General Re's reinsurance operations into the fold, General Re was also the parent of a specialty investment firm known as New England Asset Management (NEAM). When this buyout was completed in December 1998, Berkshire became the new owner of NEAM. NEAM oversees well in excess of the $100 million AUM threshold required for 13F reporting. In other words, it's required to file a 13F each quarter that outlines which stocks and exchange-traded funds (ETFs) were bought and sold. Even though Buffett doesn't oversee the trading activity of NEAM in the same way he does for Berkshire Hathaway's $294 billion portfolio, what New England Asset Management owns is, ultimately, part of Berkshire Hathaway. Thus, NEAM can be viewed as Warren Buffett's "secret" portfolio. As of the end of 2024, Buffett's secret portfolio had $585.5 million of invested assets spread across 121 holdings. Over the last two years, the largest holdings for NEAM have been highly diversified, low-cost ETFs and index funds, such as the SPDR S&P 500 ETF Trust, which attempts to mirror the performance of the benchmark S&P 500 (SNPINDEX: ^GSPC). Despite NEAM being a separately run portfolio, New England Asset Management and Buffett's $294 billion portfolio at Berkshire share a common theme: net stock selling. According to Berkshire Hathaway's cash flow statements, Warren Buffett has been a net seller of stocks in each of the last nine quarters, with selling activity really picking up in 2024 via top holdings Apple and Bank of America. On a cumulative basis, Berkshire's chief has overseen $173 billion in net-equity sales since Oct. 1, 2022. But it's a similar story for New England Asset Management. When 2022 ended, Buffett's secret portfolio had $5.43 billion invested across 117 holdings. But as of Dec. 31, 2024, the invested value of this portfolio has been reduced by $4.85 billion, or more than 89%, to $585.5 million. This great-minds-think-alike moment probably has everything to do with the stock market being historically pricey. Almost a quarter of a century ago, in an interview with Fortune magazine, Warren 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, which divides the cumulative market cap of publicly traded stocks by U.S. gross domestic product (GDP), has come to be known as the "Buffett Indicator." When back-tested to 1970, the Buffett Indicator has averaged a reading of 85% -- i.e., the total market cap of all U.S. stocks equals around 85% of U.S. GDP. On Feb. 18, 2025, the Buffett Indicator hit an all-time high of more than 207%! But this isn't the only warning sign that stocks are pricey. 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), is hitting historic levels. The Shiller P/E is based on average, inflation-adjusted earnings over the last 10 years. When back-tested 154 years (to January 1871), the S&P 500's Shiller P/E has averaged a multiple of 17.21. As of the closing bell on March 3, the Shiller P/E stood at 36.85, which isn't too far below its closing high of 38.89 during the current bull market rally. This marks the third-highest level the Shiller P/E has achieved during a continuous bull market since January 1871. Expanding the lens a bit wider, there have been six instances, including the present, where the S&P 500's Shiller P/E has surpassed 30 for a period of at least two months. The previous five occurrences all, eventually, resulted in the S&P 500 shedding at least 20% of its value. Warren Buffett and New England Asset Management's investment team are ardent value investors who aren't shy about sitting on their hands and/or selling stocks when things seem pricey. While the Oracle of Omaha has a phenomenal track record of pouncing on wonderful companies when price dislocations occur, the stock market appears to be a ways away from offering a value proposition. Unless a sizable stock market correction takes shape, expect the $294 billion portfolio overseen by Buffett, as well as his "secret" $586 million portfolio supervised by the investment advisors at New England Asset Management, to remain net sellers of stocks. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $304,161!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $44,694!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $534,395!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of March 3, 2025 Bank of America is an advertising partner of Motley Fool Money. Sean Williams has positions in Bank of America. The Motley Fool has positions in and recommends Apple, Bank of America, and Berkshire Hathaway. The Motley Fool has a disclosure policy. News Flash: Warren Buffett's "Secret" Portfolio Has Sold Nearly 90% of Its Invested Assets in 2 Years was originally published by The Motley Fool Sign in to access your portfolio
Globe and Mail
07-03-2025
- Business
- Globe and Mail
News Flash: Warren Buffett's "Secret" Portfolio Has Sold Nearly 90% of Its Invested Assets in 2 Years
One of the best aspects of putting your money to work on Wall Street is that it's freer and fairer than ever. Most brokerages have eliminated minimum deposit requirements and commission fees associated with common stock trades on major U.S. exchanges. Additionally, investors have access to income statements, balance sheets, investor presentations, and a host of economic data at the click of a button. One of the most important data releases each quarter occurred just three weeks ago – and I'm not talking about any specific earnings report or the monthly inflation report. Feb. 14 marked the deadline for institutional investors with at least $100 million in assets under management to file Form 13F with the Securities and Exchange Commission. A 13F provides a snapshot that allows investors to see which stocks Wall Street's leading money managers purchased and sold in the latest quarter (in this case, the December-ended quarter). While there are dozens of asset managers that make waves on Wall Street, no money manager garners attention quite like Berkshire Hathaway 's (NYSE: BRK.A)(NYSE: BRK.B) billionaire CEO, Warren Buffett. The appropriately named "Oracle of Omaha" is overseeing a 44-stock, $294 billion portfolio at Berkshire, which is highly concentrated into a few of his best ideas. But what you might not realize is that Berkshire Hathaway's quarterly 13F doesn't tell the complete story about what's under the hood. Warren Buffett has a $586 million "secret" portfolio Although Berkshire Hathaway has made in the neighborhood of five dozen acquisitions with Warren Buffett at the helm, one in particular stands out. In 1998, Berkshire acquired reinsurance company General Re in an all-share deal valued at $22 billion. While the purpose of this deal was to incorporate General Re's reinsurance operations into the fold, General Re was also the parent of a specialty investment firm known as New England Asset Management (NEAM). When this buyout was completed in December 1998, Berkshire became the new owner of NEAM. NEAM oversees well in excess of the $100 million AUM threshold required for 13F reporting. In other words, it's required to file a 13F each quarter that outlines which stocks and exchange-traded funds (ETFs) were bought and sold. Even though Buffett doesn't oversee the trading activity of NEAM in the same way he does for Berkshire Hathaway's $294 billion portfolio, what New England Asset Management owns is, ultimately, part of Berkshire Hathaway. Thus, NEAM can be viewed as Warren Buffett's "secret" portfolio. As of the end of 2024, Buffett's secret portfolio had $585.5 million of invested assets spread across 121 holdings. Over the last two years, the largest holdings for NEAM have been highly diversified, low-cost ETFs and index funds, such as the SPDR S&P 500 ETF Trust, which attempts to mirror the performance of the benchmark S&P 500 (SNPINDEX: ^GSPC). Despite NEAM being a separately run portfolio, New England Asset Management and Buffett's $294 billion portfolio at Berkshire share a common theme: net stock selling. The Oracle of Omaha's hidden portfolio has been a net seller of stocks for two years According to Berkshire Hathaway's cash flow statements, Warren Buffett has been a net seller of stocks in each of the last nine quarters, with selling activity really picking up in 2024 via top holdings Apple and Bank of America. On a cumulative basis, Berkshire's chief has overseen $173 billion in net-equity sales since Oct. 1, 2022. But it's a similar story for New England Asset Management. When 2022 ended, Buffett's secret portfolio had $5.43 billion invested across 117 holdings. But as of Dec. 31, 2024, the invested value of this portfolio has been reduced by $4.85 billion, or more than 89%, to $585.5 million. This great-minds-think-alike moment probably has everything to do with the stock market being historically pricey. Almost a quarter of a century ago, in an interview with Fortune magazine, Warren 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, which divides the cumulative market cap of publicly traded stocks by U.S. gross domestic product (GDP), has come to be known as the " Buffett Indicator." When back-tested to 1970, the Buffett Indicator has averaged a reading of 85% -- i.e., the total market cap of all U.S. stocks equals around 85% of U.S. GDP. On Feb. 18, 2025, the Buffett Indicator hit an all-time high of more than 207%! S&P 500 Shiller CAPE Ratio data by YCharts. But this isn't the only warning sign that stocks are pricey. 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), is hitting historic levels. The Shiller P/E is based on average, inflation-adjusted earnings over the last 10 years. When back-tested 154 years (to January 1871), the S&P 500's Shiller P/E has averaged a multiple of 17.21. As of the closing bell on March 3, the Shiller P/E stood at 36.85, which isn't too far below its closing high of 38.89 during the current bull market rally. This marks the third-highest level the Shiller P/E has achieved during a continuous bull market since January 1871. Expanding the lens a bit wider, there have been six instances, including the present, where the S&P 500's Shiller P/E has surpassed 30 for a period of at least two months. The previous five occurrences all, eventually, resulted in the S&P 500 shedding at least 20% of its value. Warren Buffett and New England Asset Management's investment team are ardent value investors who aren't shy about sitting on their hands and/or selling stocks when things seem pricey. While the Oracle of Omaha has a phenomenal track record of pouncing on wonderful companies when price dislocations occur, the stock market appears to be a ways away from offering a value proposition. Unless a sizable stock market correction takes shape, expect the $294 billion portfolio overseen by Buffett, as well as his "secret" $586 million portfolio supervised by the investment advisors at New England Asset Management, to remain net sellers of stocks. Don't miss this second chance at a potentially lucrative opportunity Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $304,161!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $44,694!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $534,395!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon. Continue » *Stock Advisor returns as of March 3, 2025
