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Warren Buffett recently stated that the stock market is undervalued IF interest rates stay near current levels. Recently, the famed investor Warren Buffett was on CNBC with Becky Quick and was asked about his thoughts about the valuation of the stock market. Warren knows that he has the power to move markets and, as such, answered very cleverly when he stated:.

But the risk always is, is that interest rates go up a lot, and that brings stocks down.

But I would say this, if the ten-year stays atand they would stay there for ten years, you would regret very much not having bought stocks now. Now that the greatest investor of our time states that stocks are cheap, it's time to put in those buy orders, right? Not so fast, we need to think about the context of what he actually said: IF interest rates stay this low, stocks are cheap.

Let's take a peek at the historical year Treasury yields:.

This chart shows us that the year Treasury bond is at or near all-time lows currently sitting at 2. The only other time it was near these levels was in during WWII. I'm not smart enough to know whether rates will rise in the short or medium term, but being a betting man, I would wager that over the long term, year Treasury rates will meander towards win cash surveys long-term average, which YCharts lists at 6.

Treasury yields rising would obviously have an inverse impact upon the stock market.

But with all the artificial demand, it may take a long time to get back to Treasury yields to get back to "normal. So, given all this information, what's an investor to do?

I would be extremely cautious about any stock or bond purchases. My opinion is that stock market valuation is being distorted by factors outside investors' control. Now again, I have no clue what will happen warren buffett stock market outlook the future, but I have trouble believing that interest rates can go lower. I also have trouble believing that Warren Buffett believes interest rates will stay this low considering he also stated in his recent CNBC interview that:.

I just don't understand it.

And they sell a lot of them so clearly, there's somebody out there buying them But the idea of committing your money, you know, at roughly 3 percent for 30 years. Each of us should use our own intellect and figure out what the greatest investor ever is trying to say. So all this brings us to what an investor today can do.

I would do what Warren Buffett does, which is hold extra cash and wait for a better opportunity see below chart.

Warren Buffett’s Bullish Market Outlook| Latest News Videos | Fox Business

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Warren Buffett And Interest Rates | Seeking Alpha

Warren Buffett And Interest Rates Mar. Summary Warren Buffett recently stated that the stock market is undervalued IF interest rates stay near current levels. This is one of the worst times ever to add new funds to the stock market.

Warren knows that he has the power to move markets and, as such, answered very cleverly when he stated: Let's take a peek at the historical year Treasury yields: Macro ViewMarket Outlook.

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