Warren Buffett's Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) had $147 billion in cash, cash equivalents, and short-term investments on its balance sheet as of June 30 -- a treasure chest of investable capital. However, the company was still a net seller of stocks through the first half of the year. In fact, Berkshire reported $21 billion in net equity security sales through the quarter ended in June, a dramatic reversal from its $45 billion in net purchases during the same period last year.

The unsettling implication is that the CEO and his fellow investment managers Ted Weschler and Todd Combs see the stock market as overvalued. And historical data supports that assertion. According to FactSet, the benchmark S 500 (SNPINDEX: ^GSPC) currently trades at 18.8 times forward earnings, a premium to the 10-year average of 17.5 times forward earnings.

The S 500 is still up 18% year to date on signs of economic resilience, but stock market momentum fizzled in August, and bearish sentiment reached a three-month high. So, investors may be wondering whether now is a good time to buy stocks. To answer that question, here's an important insight from Berkshire's financial filings, followed by some sensible investing advice from Buffett himself.

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Source Fool.com