Berkshire Hathaway announced over the weekend it wrote down billions of dollars in the value of its holding in Kraft Heinz, after selling out of its stake in Paramount Global at a loss last year. The failed bets are rare blemishes in the investing record of CEO Warren Buffett.

The cyclically adjusted price-to-earnings (CAPE) ratio is a valuation metric typically used to gauge whether entire stock market indexes are overvalued or undervalued. It was developed by Nobel-winning economist Robert Shiller during the dot-com bubble, so it is sometimes referred to as the Shiller P/E ratio.

Berkshire Hathaway didn’t just report earnings this quarter; it sent a clear message. In Q2 2025, Warren Buffett’s timeless investment firm posted $12.37 billion in net earnings to shareholders, down sharply from $30.3 billion in the year-ago period.