Buffett’s $344B Warning

Hi ,

The market feels great right now. Maybe too great.

Indexes are flirting with new highs. Headlines are full of “soft landing” optimism. AI darlings are running hot. But beneath the surface, something is off.

We’ve just entered valuation territory more expensive than 94% of all market history. That’s rarefied air. It’s the kind of environment where the next decade’s returns get locked in long before we see the outcome.

Meanwhile, the 10-year Treasury yields more than the S&P 500, offering a risk-free return without the daily swings, earnings misses, or headline-driven sell-offs. And Warren Buffett, the most patient dealmaker of our time, is sitting on a record $344 billion in cash, and ending his 11th quarter selling, saying plainly: he doesn’t see a single deal that meets his standards.

That matters. Stretched valuations plus real interest rates change the entire equation:

• Multiples compress.

• Discount rates bite.

• Passive portfolios lose their cushion.

So, as inventors, what do we do when sentiment is strong but the data suggests turbulence ahead?

I’m not here to call the top. I’m here to show you the setup, and the moves UHNWIs are already making to protect their downside and position for the next regime.

Here’s what’s inside this week’s issue:

• Stack Shift: What stretched valuations mean for forward returns, and why now is the time to reposition. (Plus our full report on how we got here and where to go next)
  

• Case Study: How a 97% collapse reveals the wealth-destroying behavior of volatile markets.
  

• The UHNWI Playbook: The portfolio shift sophisticated investors make when valuations are stretched.

By the end, you’ll have a clear view of where we are in the cycle — and a tactical plan to make the next decade work for you, not against you.

Let’s dig in.

— Walker Deibel

WSJ & USA Today Bestselling Author of Buy Then Build

Founder, Build Wealth

P.S. Want to see what I’m allocating in right now? I’ve just put together a week-long email series breaking down one of the most unique real estate deals I’ve ever put together. You can sign up HERE: https://go.buildwealth.com/build-legacy

SHIFT YOUR STACK

Stock Valuations Are Reaching Historic Levels Not Seen Since DOT-COM

We’re back in rare air. Here’s What That Means for Your Next Move

The Shiller CAPE ratio shows how expensive the stock market is compared to a decade’s worth of average earnings — the higher it is, the less room there’s been for big future gains. And last month, it hit 38, a high only hit a few times in the last 150 years—1999, 2007, and the 2021 surge.

What came next?

• Volatility spiked.

• Real returns lagged for years.

• Private capital strategies pulled ahead.

Here’s the thing: we’re not drawing your attention to this so we can all run out and panic sell. The stock market is a great, long term investment in the strongest companies in the world. It’s liquid, easy to diversify, and has extremely good coverage.

Instead, evidence suggests there isn’t much upside left. So…

It’s time to consider our positioning for the decade ahead.

When markets are priced for perfection, every assumption has to go right. That’s a fragile foundation for a 10–20 year wealth arc. Volatility under the surface is already showing, with monthly swings as large as 9% up and down over the last two years.

What high valuations mean for investors:

1. Trajectory matters. Expensive markets can run longer than expected, but forward returns have historically compressed from these levels. Lower return assumptions while maintaining discipline.
   

2. Multiple compression is the quiet risk. Even if earnings grow, a correction from 24–27x forward P/E to a more normal 18–20x can erase years of compounding. The danger is overpaying for growth.
   

3. Regime shifts favor private markets. Every time public markets have reached these extremes, capital has rotated — from momentum to value, public to private, indexing to active ownership. The advantage goes to assets where fundamentals, not sentiment, drive the outcome.

In our world, that means focusing on assets with:

• Durable cash flow

• Downside protection

• Real asset backing

• A clear value-creation plan

This week’s full report lays out the valuation landscape, shares historical parallels, and includes a scenario matrix to stress-test your own assumptions before the market does it for you.

When public markets price in perfection, private markets hold the better odds.

Read the full report →

Before we jump into the UHNWI Playbook, let’s revisit our favorite example of when valuation detaches from fundamentals…

CASE STUDY

Case Study — GameStop: When Sentiment Meets Gravity

Remember GameStop? That surge to ~$483 in 2021 wasn’t a business transformation—it was a sentiment event. Retail coordination and a short squeeze levitated the stock far beyond the company’s earnings power. By 2025, the share price had given back roughly 97% of that peak, turning paper wealth into a cautionary tale.

• What this shows: When price outruns cash flow, the investor’s fate is tied to mood, not money. Mood can flip in a week; conversely, cash flow compounds over years.

• Volatility’s wealth destruction: GameStop is an extreme case, but the underlying behavior is everywhere in expensive markets. When valuations are stretched, even quality names can swing wildly, locking in losses that might have been avoided. (Check out our recent volatility chart in Behind The Numbers… yikes!)
  

• Liquidity’s trap: Public markets promise easy exits… until they don’t. When narratives break, everyone races for the same doorway and “great” stocks turn into falling knives.
  

• Why smart money dodged this: Most of us just enjoyed the crazy headlines, but the reason we didn’t all jump in is because we know better. UHNW allocators anchor their core where outcomes are negotiated and predictable, not message-board momentum.
  

• Bridge to action: Use the lesson, not the drama: harvest gains where multiples are stretched, rotate toward cash-flow engines.

Volatility and overvaluation feed each other. The GameStop sensation in early 2021 was textbook: a stock untethered to anything real, driven sky-high by viral crowd demands. 

Some traders made money, but many latecomers were left holding steep losses once the hype collapsed.

The more you can anchor your portfolio in assets that compound on fundamentals rather than market mood (and social media frenzy), the more control you keep over your wealth trajectory - and the less you leave to chance in someone else’s speculative game.

BEHIND THE NUMBERS

Today's market is delivering whiplash. Over the past 18 months, the S&P 500 has seen monthly moves as high as +9.1% and as low as −9.3%, a pattern consistent with past valuation extremes. 

THE PLAYBOOK

Build Your Core in Private Markets

When you study the portfolios of ultra-high-net-worth investors, one pattern shows up again and again: their core wealth lives in private markets, not public equities.

Stocks still play a role — but it’s usually as a source of liquidity and tactical trades, not the primary growth engine. The majority of compounding comes from assets that don’t reprice daily, where entry terms can be negotiated, and where operators have direct alignment with investor capital.

Why this works:

• Control over entry price and structure. In private markets, price is set at the deal table, not by sentiment swings.

• Stability in perceived value. Assets aren’t repriced minute-to-minute, which removes behavioral risk from daily volatility.

• Tax efficiency. Many private vehicles allow for deferral, depreciation, or other structures that reduce taxable income.

• Value creation over multiples expansion. Returns are driven by improving the asset or business, not waiting for a higher market multiple.

How to execute like a UHNWI:

1. Trim exposure to public equities, shift into private credit and niche real estate. With public markets trading at 24–27× forward P/E, the smart move is trimming exposure and reallocating to areas like private credit — a $2 trillion market now offering 8–12% yields — and specialist real estate sectors like data centers or multifamily. Even in a choppy real estate market, 44% of family offices plan to increase allocations in the coming year.
   

2. Rotate into private market yield. Private credit, cash-flowing operating businesses, and real assets can deliver income, downside protection, and lower mark-to-market stress. You don’t need daily liquidity for long-term capital.
   

3. Invest with intentional illiquidity. Locking up capital in the right private vehicles forces discipline, removing the temptation to react to daily noise.

Family offices are actively repositioning for the next market cycle. In 2025, the largest reallocation plans are toward private credit (32%), infrastructure (30%), and private equity (30%), with alternatives overall now making up 42% of portfolios.

Bonus move: Maintain 10–20% liquidity or callable capital to deploy aggressively in market drawdowns or dislocation events. The best private deals often appear when public markets are in turmoil — and the investors with ready capital are the ones who can step in and capture them.

FROM OUR SPONSOR

Our new Legacy Fund at Build Wealth offers the exact kind of fundamentals-driven cash flow and growth we use to counterbalance the S&P. 

BuildLegacy I investors will build a 7-figure real estate portfolio in one of the most in-demand neighborhoods in the midwest. A single investment into this strategic, 10-year play is well positioned to outperform the average 3-5 year syndication.

Here’s why: 

• Proven operator: My third GP role alongside AHM Group, with a track record of 46 completed projects and an average 32.13% IRR.

• Generational real estate: Irreplaceable location with over 1M annual visitors, anchored by biotech, healthcare, and cultural institutions.

• Immediate scale: Largest owner (by building count) in the neighborhood on Day 1.

• Diversified play: A blend of core, value-add, and ground-up projects inside one platform.

• Passive with GP upside: LP investors can participate in GP-level returns without operational responsibility.

• Projected returns: 5.3x equity multiple and 12% preferred return for early investors through Aug 29.

The Central West End is the best kept secret in the Midwest and we’re seeding the fund with an 11 off-market property portfolio–including all 4 corners of a key intersection– we’re acquiring from a single seller, who took four decades to assemble.

I’m looking for 45 investors to join me in this once in a decade real estate play. Interested?

Watch a recent Ask Me Anything session with Kyle Howerton, the managing partner of AHM to review this unique offering and answer the most common FAQs. Plus, live questions from real investors.

Interested in seeing inside one of our deals? Check out the full interview here

Want a bite sized breakdown instead? I’ve just put together a week-long email series going inside multiple facets of the deal, one step at a time. Sign up HERE

Accredited investors only & a $50,000 minimum.

WHAT WE ARE READING

"The first rule of Wall Street: Nobody — and I don’t care if you’re Warren Buffett or Jimmy Buffett — nobody knows if a stock’s going up, down, or sideways. Least of all stockbrokers. But we have to pretend we know."

Wolf of Wall Street (2013)