Investors look to Warren Buffett for guidance because he's proven he can weather any market storm. That's even earned him the nickname the Oracle of Omaha (his hometown), as over time, he's generally made just the right moves at just the right time. A recent example: Buffett sold positions in S&P 500 index funds in the fourth quarter, locking in gains before the benchmark went on to decline.
This top investor doesn't look into a crystal ball when planning his moves, but instead considers key elements like valuation. And the index's shift into one of its most expensive periods ever may have helped prompt him to hit the "sell" button on the Vanguard S&P 500 ETF and SPDR S&P 500 ETF Trust in the quarter.
Of course, Buffett isn't one to stand up and comment on the situation with each market movement. But over the years, the billionaire has offered many thoughts on his strategy, the market, and investing in general. For example, we know he appreciates quality companies trading for reasonable prices; we also know he doesn't go for trends, and favors holding stocks for the long term.
Over the years, Buffett has repeated one particular idea several times, in different ways. This resounding message to Wall Street couldn't be clearer, and it may change the way you see the market and invest right now. Let's listen in.
Image source: The Motley Fool.
A changing investing environment
First, though, let's take a quick look at the recent investing environment. Stocks soared over the past two years on optimism about a lower-interest-rate environment ahead, and the potential of artificial intelligence (AI) to transform how work is done. Lower rates offer companies an easier path to growth -- and AI has been seen as a technology that could unlock efficiency, cost savings, and more for companies.
All of this drove stocks to one of their most expensive levels ever as measured by the S&P 500 Shiller CAPE ratio, a metric that considers stock price and earnings over a 10-year period to adjust for shifts in the economy. It reached a level of 35, something it's only done twice before since the S&P 500 launched as a 500-company index in the 1950s.
S&P 500 Shiller CAPE Ratio data by YCharts.
However, stocks have recently retreated on concerns that President Donald Trump's tariffs on imports will hurt companies' earnings and the general economy. The S&P 500 and Nasdaq Composite both slipped into correction territory earlier this month, though the S&P 500 has since exited the correction zone.
Two key Buffett quotes
Now let's turn to Buffett's message to Wall Street, one that he's repeated over the years. Two quotes in particular express it:
"The best chance to deploy capital is when things are going down," he once said. And, in a letter to shareholders in the 1980s, Buffett wrote that he and his team at Berkshire Hathaway aim to "be fearful when others are greedy and to be greedy only when others are fearful."
This message is particularly interesting right now, amid market declines. You may be asking yourself whether now is really a good time to buy stocks -- as stocks and indexes slip, investing may seem scary. What if you buy a stock today and it falls even more tomorrow?
But Buffett tells us that times like these are actually the best moments to get in on the market. Why is this? Because as stocks fall, so do their valuations. As a result, some of the recently beaten-down players will offer you wonderful opportunities. This is the time to "be greedy ... when others are fearful."
Cheap tech stocks
For example, well-established technology stocks with bright future prospects -- such as Nvidia (NVDA 2.13%) and Meta Platforms (META 3.98%) -- have seen their shares drop into bargain territory. Today, Nvidia trades for 25 times forward earnings estimates, and Meta for 24. These could be fantastic buys for growth investors.
And even if the stock you buy today falls further in the coming days, that's OK. When you hold on for the long term -- and that's the best way to invest -- near-term fluctuations won't crush your returns.
So now you may be wondering if Buffett, too, has been buying stocks in recent days. The billionaire was a net seller of stocks last year as the market soared, but it's too early to know what moves he's been making since the start of 2025. We'll have to wait for his 13F filing in May for that information.
That said, he isn't known for making rash decisions or jumping into something on a whim -- so we may not see a sharp turnaround, with Buffett scooping up stocks like hotcakes. His words don't mean that he piles into stocks during every market downturn. They just mean that during these times, he expects to find more opportunities to get in on quality stocks at the right price than he would in soaring markets.
All of this may ease your mind as you watch the indexes fluctuate these days. Buffett's words may inspire you to seize this moment, and instead of fleeing the market, to look for smart buys that may boost your portfolio over time.
