Buffett isn’t buying.. (expect more pain soon)

Investing Simplified - Professor G•Apr 4, 2026

Summary

Nolan analyzes the market volatility of early 2026, highlighting that the S&P 500 and Nasdaq 100 are significantly down year-to-date. This downturn is primarily fueled by the conflict with Iran and an oil crisis that has pushed prices over $100 per barrel. Nolan emphasizes that the market is currently fragile, with bad news impacting valuations more severely than good news, particularly in the tech and growth sectors. He notes that the expected Federal Reserve rate cuts are being pushed back as oil-driven inflation complicates monetary policy, leading to a "higher-for-longer" interest rate environment that limits market rallies.

Nolan advises investors to avoid making impulsive decisions based on short-term news and instead focus on long-term stability. He recommends maintaining a full emergency fund and paying off debts rather than rushing to catch what might be a false bottom in the markets. Nolan aligns his outlook with Warren Buffett, who believes the stability of the banking system and the dollar's status as a reserve currency are more critical than minor market moves. The current bear case suggests that if oil remains high and the Fed stays tight, stocks will continue to struggle in a choppy, uncertain environment.

Berkshire Hathaway (BRK.B): Nolan highlights that Berkshire is currently holding over $373 billion in cash and Treasury bills, which suggests that Warren Buffett does not see current prices as a bargain. He notes that Buffett is waiting for a potential market decline of 50% or more, similar to the 2008 crisis, before deploying his massive cash pile. Nolan uses this as evidence that the current 5-6% dip is not a substantial enough opportunity for serious investors to exhaust their liquidity.

S&P 500 (VOO): Nolan points out that the S&P 500 is in correction territory and warns against "dumping everything" into the index right now. He suggests that while valuations are cheaper, they are not yet at a point of high conviction for a major buy. However, he maintains that for those with a 50-year horizon, buying and holding broad, low-fee S&P 500 ETFs remains the most reliable path to wealth within the American capitalist system.

Treasury Bills (T-bills): Nolan mentions that Buffett recently purchased $17 billion in T-bills at auction this week, using them as a safe parking spot for capital. He suggests that during times of extreme volatility and high interest rates, these assets provide a stable alternative while waiting for better entry points in the equity market. This strategy is presented as a way to avoid the "casino" aspect of the current market while keeping capital productive.

Mentioned Stocks

VOO

Sentiment: HOLDAction: RECOMMENDED

Reasoning: The S&P 500 is in correction territory and Nolan warns against aggressive buying at these levels. He states that while the long-term play (50 years) is to hold broad ETFs, the current short-to-midterm outlook is bearish due to oil-driven inflation and the delay of Fed rate cuts, making it better to keep an emergency fund for now.

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BRK.B

Sentiment: HOLDAction: RECOMMENDED

Reasoning: Nolan highlights Warren Buffett's strategy of extreme patience, noting that Berkshire is sitting on $373 billion in cash because valuations are not yet 'substantially' cheaper. He agrees with Buffett that a 5-6% dip is not enough to clear out bank accounts and implies that waiting for a larger crash (potentially 50%) is the more prudent move right now.

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BIL

Sentiment: BUY

Reasoning: Nolan notes that Buffett is actively buying T-bills ($17 billion this week) rather than stocks. Given the uncertainty surrounding the US dollar and banking stability, Nolan views Treasury bills as a superior place to hold capital compared to the current volatile stock market until real opportunities arise.

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