A precursor to a market crash? Jamie Dimon dumped JPMorgan Chase stock and Buffett hoarded hundreds of billions of dollars in cash

Recently, JPMorgan CEO Jamie Dimon sold his own stock massively, while Buffett (Warren Buffett)'s Berkshire (Berkshire Hathaway) hoarded a record 3,340 $100 million in cash. These signs leave investors wondering: Are they smelling the market storm ahead of time?

Unusual signs before the market drama

Financial media Kobeissi Letter pointed out that since US President Donald Trump took office, most capital and risk markets have made waves.

With asset management giant JPMorgan Chase CEO Jamie Dimon selling his shares on a massive basis, Berkshire hoarding an unprecedented $334 billion in cash, and the Nasdaq 100 plunging 11% in just two weeks, market panic has increased significantly.

( Germany kicks off the global government bond sell-off, Arthur Hayes: The game of money printing hunger begins! )

Dimon sold off aggressively, and a chill spread in the market

On February 20, Jamie Dimon, through entities such as family trusts and limited liability companies, sold approximately 866,361 JPMorgan ($JPM) shares at an average price of approximately $269.83 per share, for a total of $234 million. It was his first large-scale stock sale since taking over JPMorgan Chase 19 years ago.

That's not over, and according to SEC (SEC) filings, he plans to sell a total of 1 million shares by August 1.

It is worth mentioning that since Dimon began selling, $JPM shares have fallen more than 13% in just a few days, which may be a warning sign that the market is about to usher in greater volatility.

Will the "Dimon indicator" be fulfilled again?

In the past, Dimon's trading behavior was seen as an important indicator of market movements. In May 2020, when the market was at a slump due to the pandemic, he said in a CNBC interview that the $JPM was "extremely valuable", and as a result, the stock price soared 41% in three weeks, a timing point that came to be known as the "Dimon bottom (Dimon Bottom)".

Now, whether his sell-off signals more pressure on the market is also a hot topic of discussion among investors.

Buffett hoards cash and is cautious about dealing with the aftermarket

In addition, Berkshire's financial report released on February 22 showed that the company's cash reserves reached $334 billion, including $286.5 billion in U.S. Treasury bills (T-bills). Last year alone, the company's cash increased by $145.2 billion, surpassing even the $195.3 billion in Treasury bills held by the Federal Reserve (Fed).

It is worth noting that Berkshire has even not bought back its own shares for two consecutive quarters, indicating that Buffett believes that the current market valuation is on the high side and chooses to remain cautious:

There are almost no attractive investment opportunities in the market, and only in rare cases will we find something worth investing in.

The market took a sharp turn and investors panicked

After the announcement of Dimon's sell-off and Buffett's cash hoarding, the market reacted quickly. In less than two weeks, the Nasdaq 100 index plunged 11%, and the cryptocurrency market lost $700 billion in a week, showing that the capital market seems to be entering safe-haven mode.

Earlier, the Atlanta Federal Reserve's GDPNow model sharply lowered the US GDP forecast for the first quarter of 2025, from 3.9% growth to -2.4% contraction, and recession risk soared.

Meanwhile, the Fear & Greed Index (Fear & Greed Index) fell to its lowest point since the bear market in 2022, signaling a collapse in investor confidence.

( US economic outlook looms: Q1 GDP forecast revised down to -2.8% amid recession fears )

Insider transaction data disclosure alerts

Not only Dimon and Buffett, but also the insider trading trend of corporate executives also reflects the unease in the market. In early February, the inside-to-sell ratio fell to 0.22, the lowest since 1988, suggesting that company executives are more inclined to reduce their holdings than to increase their holdings.

Kobeissi Letter notes that overoptimism in risk assets has reached "unsustainable levels" and that these trading data could be a precursor to an imminent market correction.

Is it a coincidence or an accurate prediction?

Whether Dimon's sell-off, Buffett's cash reserves, and the violent market turmoil, is purely coincidental and there is no definitive answer. However, the movements of these key figures have undoubtedly cast a shock bomb for the market that condenses pessimism and hidden worries.

For investors, does this represent a defensive shift or an opportunity to buy the dip? It's up to the investors to answer.

This article Precursors to a market crash? Jamie Dimon's massive sell-off of JPMorgan Chase, Buffett's hoarding of hundreds of billions of dollars in cash first appeared in chain news ABMedia.