Warren Buffett has quietly turned Berkshire Hathaway into a cash fortress, and it's a warning sign for anyone holding stocks near record highs.

• Berkshire is sitting on a record $397 billion in cash and short-term government bonds, after the biggest stock sell-off in company history.
• He cut his Apple stake from half his holdings to a fifth, and dumped Bank of America too — not for tax reasons, since taxes have never moved him before.
• Buffett has only stepped back this hard twice: before the 1973 crash and before the dot-com bust, both times because stocks got far more expensive than the businesses were worth.
• The "Buffett Indicator" — total stock value versus the economy — is back near the danger level it hit in 1999, and a handful of tech giants now dominate the market.
• He warns the AI boom is a closed loop of giants paying each other, much like the dot-com fiber-optic bubble, while banks still sit on huge losses from old low-rate bonds.

Outlook: Buffett handed control to Greg Abel with a loaded war chest and one order — wait for prices to crash before buying.