In recent years, it's no longer a secret that Buffett has been hoarding cash and is in no hurry to invest. But in previous years, the stock god would allocate some cash to repurchase shares of his own company, Berkshire Hathaway, and this year the buyback has also stopped! This means that Buffett believes that the stock price of his own company is too expensive.

Berkshire Hathaway Class A (BRK.A.US) stock closed at $667,521 on Tuesday, up about 23% year-to-date, exceeding the S&P 500 Index's increase of about 21% over the same period.

According to the U.S. Securities and Exchange Commission's filings, Berkshire Hathaway did not repurchase any shares in the third quarter, ending a six-year share buyback program.

In the most recent quarter, Berkshire Hathaway was a net seller of stocks in its investment portfolio, with cash on hand rising to record levels. CFRA Research analyst Cathy Seifert told the media that Berkshire Hathaway's actions signal to investors that its stock may be overvalued.

According to Berkshire Hathaway's regulatory filings, Buffett will only repurchase shares when he believes the stock price is "below Berkshire's conservatively determined intrinsic value". In other words, Buffett will only repurchase when he thinks his stock price is cheap.

Cathy Seifert said, "Berkshire Hathaway not buying back any stock makes most people say, 'Well, if they're not buying back stock, why should I buy?'".

The trading price of Berkshire's Class A stock is about 1.6 times its book value. In the past, Berkshire Hathaway has stated that it would not buy back its shares if the stock price exceeded 1.2 times the book value. However, the company abandoned this principle in 2018.

Professor Robert Korajczyk from the Kellogg School of Management at Northwestern University stated to the media: "He (Buffett) is very clear that if he believes the company is overvalued, he will never buy back stocks."

Professor Aswath Damodaran from the Stern School of Business at New York University stated that Berkshire Hathaway's decision may also reflect the overall market environment. Aswath Damodaran said: "This is a signal that they are cautious about the market direction. They become cautious because they believe the market prices are too high."

As of the time of publication, Berkshire Hathaway has not responded to media requests for comments.

Analyst Russ Mould from AJ Bell stated in a report that Berkshire Hathaway's lack of share buybacks and ongoing cash reserves indicate Buffett's concerns about the economy.

Russ Mould stated in a report: "All this indicates Buffett's significant concerns about the economic background and the current state of the stock market. It also implies a risk-averse mentality and a readiness to sit and wait for better investment entry points."

Robert Korajczyk mentioned that as Berkshire Hathaway continues to accumulate cash (the company's cash holdings increased from $276.9 billion in June to $325.2 billion), it may signal to investors that Buffett believes there are no stocks worth investing in.

Robert Korajczyk said: "If they currently don't have good investment targets, then holding onto cash and waiting for a market adjustment, and then investing afterwards, makes sense."

This article is reprinted from "Wand stock", edited by Zhitong Finance: Li Fu.