The Church Is Full. So Is the Casino.

The Bloomberg terminal doesn't lie, but it does enjoy taunting you. The S&P 500 closed May 1st at 7,230.12, a fresh all-time high, and I sat there watching the tape with the specific numbness of someone who stopped being surprised by miracles and started being suspicious of them. April delivered a 10.4% rally with eight new highs. Eight. In a single month. The Nasdaq touched 25,114. And meanwhile, in Omaha, a 95-year-old man sitting in the audience — not on the stage for the first time in sixty years — looked out at all of it and said, simply, that we have never had people in a more gambling mood than now.

He's not wrong. He's also not going to do anything about it. Neither am I.

The thing about Warren Buffett is that his metaphors age better than his trades. He compared the markets to a church with a casino attached, noting that the casino has gotten very attractive to people, and that anyone buying one-day options is not investing, not speculating — it's gambling, full stop. The crowd in Omaha applauded. Then half of them went home and bought 0-DTE SPX puts. I'm not judging. I'm describing.

The S&P 500's cyclically adjusted price-to-earnings ratio — the CAPE — is now at 40.1. Forty. The last time it was above 40 was the dot-com crash, September 2000. We know how that ended. And yet here we sit, record close, VIX in the basement, AI narratives doing the heavy lifting on every earnings call from Oracle to Atlassian to companies that were making shoes last quarter and are now, somehow, technology companies.

Atlassian surged over 29% after beating Q3 revenue estimates — fine, good, real business. Apple climbed more than 3% on a fiscal second-quarter beat, with Q3 revenue guidance coming in well above analyst expectations at 14–17% growth. Also fine. But the valuation math behind the index as a whole requires you to believe in a continuity of compounding that has, historically, only ever held until it didn't. Forward P/E around 21x, above both five- and ten-year averages. CAPE at levels not seen since the millennium turned. The S&P is marching higher on the belief that AI has the tailwinds to deliver outsize returns for years to come. Belief. Not certainty. Belief.

This is the part where someone usually says that this time it's different. I've been in this business long enough to know that phrase has never once been followed by good news.

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Back in Omaha: Berkshire's cash pile swelled to a record $397.4 billion in Q1 2026, and the conglomerate was a net seller of equities, offloading roughly $24.1 billion in stocks while buying about $16 billion. That's fourteen consecutive quarters of net selling, running now through both Buffett's tenure and Greg Abel's. Buffett acknowledged the current environment offers few ideal places to deploy capital, and that prices on a lot of things will look very silly. Fourteen quarters. $397 billion parked in T-bills. Not a typo. Nearly four hundred billion dollars in cash earning 5% because the alternative is paying up for assets that already look expensive and will look worse when the music stops.

The market's response? Berkshire shares have fallen about 6% year to date, lagging the S&P 500's gain, and have underperformed the index by more than 30 percentage points since Buffett signaled plans to step down last May. The crowd has decided that sitting on cash is wrong, that caution is cowardice, that there will always be a bigger bid. Maybe they're right. For now, anyway.

Greg Abel, to his credit, didn't blink. He stated clearly he has no intention of breaking up the conglomerate, emphasizing a culture built on autonomy and disciplined capital allocation. He outlined what he called the "core four" equity positions — Apple, American Express, Moody's, and Coca-Cola — as the foundation of Berkshire's portfolio, alongside the Japanese trading house stakes. Boring. Durable. The kind of thing that sounds deeply unfashionable at a moment when Allbirds just pivoted to AI and its stock surged.

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There's a particular flavor of cognitive dissonance required to hold this market in your head right now. ISM manufacturing prices surged to their highest since April 2022 as tariffs and Iran-related energy costs flow through the supply chain. The prices index jumped 6.3 points to 84.6 while employment tipped further into contraction at 46.4. Stagflation's shadow, right there in the data. But the Nasdaq closed at 25,114. Because Apple guided above consensus and Atlassian had a good quarter, and the brain does what brains do — it grabs the signal it wants and suppresses the noise it doesn't.

Buffett noted that the truly juicy buying opportunity won't arrive until panic hits and nobody is answering the phone. That's the real tell. Not when people are nervous. Not when they're cautious. When they stop picking up entirely. The bid-ask spreads blow out, the liquidity evaporates, and the investor who spent years being mocked for holding cash becomes the only buyer in the room.

We're not there. We might not be there for a while. But the distance between here and there has closed considerably, and almost nobody is talking about it because the tape is green and the AI story is still intact and Palantir reports after the close tonight.

The church is full. The casino is fuller. And somewhere in Omaha, an old man is sitting in the audience, watching both.

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Published May 4, 2026