At the beginning of the year, Buffett's company Berkshire Hathaway sold shares of American banks and financial companies worth about $3.2 billion (£2.4 billion).
Buffett sold a stake in Citigroup worth about $1 billion, shed shares of Bank of America valued at over $2 billion, and part of his stake in Capital One.
"Berkshire is clearly reducing its stake in U.S. bank stocks," says Larry Cunningham, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware.
"This activity signals a cautious or even bearish outlook on banking."
Such large-scale moves are not unusual for Berkshire Hathaway. But Buffett, perhaps the most successful investor of all time, has a reputation for having an extraordinary talent for predicting market trends.
The 94-year-old man, who will retire from his position as head of Berkshire Hathaway at the end of this year, accumulated a record $350 billion before the markets fell earlier this year, prompting analysts to say he anticipated the crash. Millions of devoted followers track his every move.
Could his decision to shed bank stocks signal an impending downturn?
Buffett is not alone in selling. Jamie Dimon, CEO of JP Morgan, sold about $31.5 million of his shares in the investment bank in April, marking his first sale since taking the top job in 2005.
Analysts believe Trump's economic roller coaster will finally hit the American economy in the second half of the year.
Inflation in the U.S. rose to 2.7% in June, and economists say this is a sign of things to come. Banks will be a lifeline in the mine for any economic troubles.
Recent threats by the president to fire Federal Reserve Chairman Jerome Powell will only heighten concerns that economic policy is going off the rails.
Buffett may have bet that American banks have peaked.
"Partially this may be due to expectations that these current stock valuations are not sustainable," says Gennady Goldberg, head of interest rate strategy in the U.S. at TD Securities.
American banks have had a great run, but there are obvious problems on the horizon for this sector and the U.S. economy as a whole.
One of the biggest questions is the outlook for long-term government borrowing costs.
Trump's trade tariffs are expected to lead to increased inflation, which in turn will mean higher yields on U.S. Treasury bonds, as investors demand greater returns.
Banks would benefit from higher interest rates on their bond portfolios, but the higher yield on Treasury bonds will cause a wave of new pressure on the credit sector. The number of bad loans may increase as borrowers struggle to repay their debts.
The higher yield on Treasury bonds will make other investments less attractive, leading to a decline in merger and acquisition activity. This is bad news for investment banks, which have been doing so well.