S&P 500 and Nasdaq Slump as Berkshire Hathaway Hoards Cash

The S&P 500 fell 4.4% and the Nasdaq slumped 5.5% on Thursday, November 6, 2026, a drop that pushed the Nasdaq into correction territory. Market analysts attribute the volatility to an elevated cyclically adjusted price-to-earnings ratio, which currently exceeds 41, drawing comparisons to the instability seen before the dot-com bubble.

Warren Buffett, the former CEO of Berkshire Hathaway, has cautioned against these conditions, stating that it is difficult to find value when investors prefer gambling. He compared the current market environment to a casino, suggesting that speculative behavior has overtaken value investing.

In response to these risks, Berkshire Hathaway increased its cash reserves to nearly $400 billion to maintain buying power during a potential crash. Financial advisors are now encouraging dividend investors to mirror this discipline by pausing automatic reinvestment programs and establishing target purchase prices for high-quality assets to avoid overpriced stocks.