Warren Buffett usually gets busy buying during bear markets. Instead of being greedy while others are fearful in the current crisis, the legendary investor has been busy offloading his large stakes in airline stocks. As for buying, Buffett admitted at Berkshire Hathaway's recent annual shareholder meeting that it has "not done anything, because we don't see anything that attractive to do".

Buffett is famous for his optimistic contrarianism – think back to the aftermath of Lehman Brothers’ bankruptcy in October 2008, when he penned his “Buy American. I am” editorial in the New York Times – but right now he’s cautious, even saying that Berkshire’s $137 billion cash pile “isn’t all that huge when you think about worst-case possibilities”.

Berkshire’s position “will be to stay a Fort Knox”, indicating he is worried things will get worse before they get better. Buffett doesn’t pretend to be a fortune-teller, of course, and it’s fair to say he is cautious rather than pessimistic right now. Still, the reason he can’t find any bargains is because US valuations continue to look elevated. That’s concerning, given the apocalyptic economic environment, and Buffett’s inaction suggests this is not a time to be bold – it’s a time to be cautious.