## [# OMAH Trends as ‘Buffett Indicator’ Flashes Warning Signs](/sections/features/omah-trends-buffett-indicator-flashes-warning-signs)
# OMAH Trends as ‘Buffett Indicator’ Flashes Warning Signs
\- Buffett-inspired ETFs appear on cautious investors’ radar as market continues to climb ‘wall of worry.’
\- The Buffett Indicator and the Fear and Greed Index are flashing red.
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[By Kent Thune ](/authors/kent-thune)
Jul 29, 2025
Edited by: David Tony
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"Invest like Buffett" ETFs, such as the [**VistaShares Target 15 Berkshire Select Income ETF (OMAH)**](/omah), are gaining attention amid elevated market risks, even as mega-cap growth stocks continue to dominate the market-cap-weighted S&P 500 index.
The interest in value-oriented strategies comes with a significant backdrop: Stocks are currently trading at all-time highs, yet the full impact of new tariffs and persistent poor consumer sentiment has yet to be fully felt across the economy and major market indices.
Two prominent market gauges, the Buffett Indicator and the Fear & Greed Index, are both flashing warning signs, which have historically preceded periods of market decline.
We break down what they mean, and why Buffett-inspired ETFs appear on cautious advisor and investor radars.
## Buffett Indicator, Fear and Greed Index Sound the Alarm
The Buffett Indicator and the Fear and Greed Index are flashing red at a time when long-term fundamentals don’t necessarily support the current rally. With tariffs set to re-enter in force on Aug. 1 and consumer sentiment at recessionary levels, market enthusiasm may be more about momentum than earnings.
### The Buffett Indicator
Formally known as the market capitalization-to-GDP ratio, the Buffett Indicator is a valuation metric favored by Warren Buffett himself (though he has since qualified its use as a single measure). It calculates the total value of the U.S. stock market (represented by, for example, the Wilshire 5000 or total market capitalization) as a percentage of the country's gross domestic product (GDP).
- **How it works**: If the stock market's value is significantly higher than the GDP, it suggests that stock valuations are stretched relative to the underlying economic output.
- **What it's telling us now**: As of July 2025, the Buffett Indicator is hovering around 200%-213%, significantly above its historical trend line and near multi-year highs (e.g., above 1.8 standard deviations from the trend). This level strongly suggests the U.S. stock market is overvalued, signaling that future returns may be lower and the potential for a correction is elevated.
### The Fear & Greed Index
Compiled by CNN Business, the [Fear and Greed Index](https://www.cnn.com/markets/fear-and-greed) measures two opposing emotional forces that drive investor behavior: fear and greed. It combines seven different market indicators (including stock price momentum, market volatility, the ratio of put to call options and junk bond demand) into a single score ranging from 0 (Extreme Fear) to 100 (Extreme Greed).
- **How it works:** A high score indicates that investors are exhibiting excessive greed and complacency, which can precede market tops. A low score suggests extreme fear, often signaling market bottoms.
- **What it's telling us now:** The Fear & Greed Index is currently registering a 74, which marks the line between Greed and Extreme Greed, indicating investors are feeling overly confident, often a contrarian signal for cautious investors. Historically, periods of "Extreme Greed" have often been followed by market pullbacks as enthusiasm gives way to reality.
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## Investing Like Buffett: OMAH and Other Value-Focused ETFs
In an environment where overvaluation signals are flashing, the appeal of value-oriented strategies, often associated with Warren Buffett's investment philosophy, grows. For example, OMAH is an actively managed ETF that primarily invests in an equity portfolio designed to generally mirror the 20 largest publicly disclosed equity holdings of Berkshire Hathaway, along with direct exposure to [Berkshire Hathaway Inc. (BRK.B)](https://www.etf.com/stock/BRK.B) Class B shares.
In addition to this "Buffett-esque" equity component, the fund employs a covered call options strategy on its holdings to generate a targeted annual income of 15%, distributed monthly. This aims to provide both exposure to high-quality, long-term holdings and an enhanced income stream.
Other ETFs that aim to emulate Buffett's principles, albeit with different methodologies, include:
- The [**VanEck Morningstar Wide Moat ETF (MOAT)**](/moat): This ETF invests in companies Morningstar identifies as having sustainable competitive advantages, or "economic moats," a core tenet of Buffett's investing.
- The [**iShares MSCI USA Quality Factor ETF (QUAL)**](/qual): QUAL focuses on U.S. companies with high return on equity, stable earnings growth and low financial leverage, metrics that often align with Buffett's preference for financially sound businesses.
## Buffett, Fear and the Second Half of 2025
While the "wall of worry" concept suggests markets can climb despite concerns, the current confluence of indicators warrants heightened vigilance. The Buffett Indicator and Fear & Greed Index collectively point to a market potentially ripe for a correction, fueled by elevated valuations and excessive optimism.
As we move through the second half of 2025, investors face considerable uncertainty around trade policy and the full impact of new tariffs, persistent inflationary pressures, the trajectory of global economies and ongoing geopolitical risks.
While the market can certainly defy expectations and continue its ascent, a prudent approach involves understanding these warning signs. Ultimately, diversification, a focus on long-term objectives and a clear assessment of one's risk tolerance remain paramount for navigating the unpredictable investment landscape ahead.
*Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing in ETFs involves risks, and investors should carefully consider their investment objectives and risk tolerance before making any investment decisions.*
*At the time of publication, Kent Thune did not hold a position in any of the aforementioned securities.*
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[ Kent Thune CFP, Senior Content Editor ](/authors/kent-thune)
Kent Thune is Senior Content Editor for etf.com, focusing on educational content, thought leadership, content management and search engine… [View Bio](/authors/kent-thune)
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