Tax increases are what Warren Buffett is afraid of, but the market is not. He doesn’t have much room to move.

On Monday, Kamala Harris’s campaign for president released a policy idea: they want to raise the business tax rate from 21% to 28%.

You can tell the market took it seriously because the S&P 500 SPX -0.06% went up 1% after a plan was released that would cut domestic earnings by 9%. This was the fifth best finish in track record. Even though there is a 50/50 chance that Harris will win and oddsmakers say Republicans will win back the Senate 72% of the time, it was still a very boring election.

But it’s a good way to start talking about what Warren Buffett has been up to at Berkshire Hathaway BRK.B 0.23% A transcript put together by FactSet shows that Buffett said, “I would say with the present fiscal policies, I think that something has to give” at the annual shareholder meeting in May.

I also believe that taxes will likely go up, and the government has the power to take a bigger chunk of yours, mine, or Berkshire’s income. One day, they might decide that the large budget imbalance is not something they want because it has important effects. He also said, “They might not want to cut spending that much, and they might decide to take a bigger cut of what we earn and we’ll pay it.”

“And if I do it at 21% this year, we’ll do it at a higher rate next year.” “I don’t think you’ll mind that we sold a few Apple iPhones this year.” Buffett has sold more than “a little” of Apple AAPL 0.25%. During the second quarter, he got rid of almost half of his stake in the company that makes iPhones.

There’s no doubt that Buffett would hold on to Apple stock even if he thought it was cheap. John Huber, who runs the North Carolina financial firm Saber Capital Management and writes the blog Base Hit Investing, says, “I think his Apple sale is just a result of how he invests.” “The stock has gone up in price and is now worth less, so he thinks cash is a better option.”

As Huber points out, one reason Buffett has been saving money is that he doesn’t have many other options. That’s because Buffett is in charge of a fund worth about $600 billion. Going backwards, there are only 27 U.S. stocks with a market value of $300 billion. This means that Berkshire Hathaway would have to invest $30 billion in these 27 stocks to own 10% of the company. Huber says he could even look at another 100 stocks from other countries to add to the ones he already owns.

Huber says, “The huge size of the portfolio and the high prices of large cap stocks make it almost impossible to put cash to work at the rates of return he’d like (double digits).” “It’s not market timing; it’s just the range of prices and the small number of opportunities that get smaller every year.”

Most buyers don’t have to deal with Buffett’s rules, which is good news. Huber says, “There are a lot of opportunities for the rest of us mere mortals in smaller stocks. Some of them have been left behind and offer a nice combination of low prices and good capital allocation.”

The market

The prices of U.S. stock futures ES000.08% NQ000.14% went up slightly. After recent pressure during talks to end the war between Israel and Gaza, crude CL000.84% stayed the same.