First, a sufficient number of other investors did not share my skepticism about the global economy. Second, I misjudged investor faith in central bankers. Third, I underestimated the continued global appetite for yield bearing stocks.

Warren Buffett - Berkshire Hathaway - Stock Picks and Performance - Insider Monkey

However, in recent days a host of big money investors have been vocally bearish. Does this mean the herd is turning and that I may have just been early? Perhaps, but what are these investors seeing that has led them to embrace my skepticism?

Warren Buffett Portfolio - Stock Picks and Performances

Big money understands that investing is more about balancing risk and reward than about being "right. The odds may no longer be in equity investor's favor.

Warren Buffett is one of the biggest investors in the world and his preferred method for valuing the stock market is now suggesting that U.

Buffett has stated that using Total Market Capitalization to GDP is "probably the best single measure of where valuations stand at any given moment.

Currently, the ratio of Total Market Cap as measured by the Wilshire Total Market Index to GDP is percent. There is only one other time since that this ratio has registered such an overvalued reading…that was in December of Moreover, GuruFocus has tracked market returns using this indicator and at current levels it suggests the total expected yearly return for U. The current dividend yield is roughly 2. Think about that for a minute. The preferred valuation metric of the world's most successful and wealthiest investor is suggesting that there is little to no upside for stocks.

When big money tries to calculate the risk of investing against the reward, a negative return will simply not compute. To my mind, this could be the reason that the likes of high-profile investors Jeff Gundlach and Bill Gross have suggested either selling everything or buying gold. In addition to the lack of reward, faith in the ability of central bankers to manufacture an economic recovery is being challenged. Over the last few trading sessions the yield on Japanese government bonds have jumped the most since In the aftermath of the Japanese yield spike the Japanese stock market fell more than 7 percent.

Japan has been the laboratory for experimental monetary policy for the better part of 20 years. Recently the head of the Bank of Japan called for a review of current policy to be released in September.

The market reaction to this anticipated review has been decidedly negative. The implication is that investors fear the Bank of Japan will admit defeat and no longer engage in market manipulation. I personally have my doubts that it will abandon its policies, but the crisis of faith is catalyst enough for investors to sell.

Yet another reason big money is turning bearish. Finally, the search for yield is showing signs of coming to an end. Since the February market lows, the iShares Select Dividend ETF DVY is up To be sure the outperformance of the lower yielding SPY is a recent phenomenon, but cracks in the foundation are appearing.

Big money is turning bearish because the reward does not justify the risk. The market cap of U. The recent spike in Japanese yields has shaken investor faith in omnipotent central bankers, while the horn is blowing "Going Home" on the hunt for yield.

For a few weeks in February my bearish view was accurate, but the fullness of time has proved I miscalculated the skepticism of others, the faith in central bankers and when the hunt for yield would end.

Perhaps the recent growls from prominent investors is a signal that the herd is turning, but the truth is only time can tell. What is clear to me is that the risk of owning stocks is simply not justified by the reward.

I continue to remain defensive on U.

Brian Kelly is founder and managing member of Brian Kelly Capital LLC, a global macro investment firm catering to high net worth individuals, family offices and institutions. He is also the creator of the BKCM Indexes, benchmarks for multi-asset money managers.

He's also the author of the " The Bitcoin Big Bang: How Alternative Currencies Are About to Change the World. For more insight from CNBC contributors, follow CNBCopinion onTwitter. Asia Europe Stocks Commodities Currencies Bonds Funds ETFs Investing Trading Nation Trader Talk Financial Advisors Personal Finance Etf Street Portfolio Watchlist Stock Screener Fund Screener Tech Mobile Social Media Enterprise Gaming Cybersecurity Tech Guide Make It Entrepreneurs Leadership Careers Money Specials Shows Video Top Video Latest Video U.

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