Recently, the news of Buffett's deputy reducing his holdings of Berkshire Hathaway stocks has sparked heated discussions in the capital market!
According to documents disclosed by the US Securities and Exchange Commission (SEC), one of Buffett's main aides, Ajit Jahn, Berkshire's vice chairman and head of insurance business, sold 200 shares of Berkshire's Class A stock at a price of approximately $695400 per share on September 9, cashing out approximately $139 million. The stocks sold this time account for 55% of Ajit Jahn's total shares in Berkshire Hathaway.
After this sale, Jain directly holds 61 shares of Berkshire Hathaway Class A stock, and he and his spouse hold 55 shares of the family trust fund established for their descendants. In addition, his non-profit company Jain Foundation holds 50 shares.
This is also the biggest sell-off for Jahn since joining Berkshire Hathaway in 1986. At present, it is unclear the specific reason for his sale of stocks, but he did take advantage of Berkshire's recent high stock price.
As of the end of August, the group's stock price exceeded $700000 and its market value reached $1 trillion. Jain's selling behavior occurred five days after Berkshire's stock price surpassed $727000, and less than two weeks after its market value first broke through $1 trillion.
David Cass, a finance professor at the Robert Smith School of Business at the University of Maryland, said, "This seems to indicate that Jahn believes Berkshire's valuation has reached its highest level
This is also consistent with Berkshire Hathaway's recent significant slowdown in stock repurchase activities. Berkshire Hathaway only repurchased stocks worth $345 million in the second quarter, far lower than the $2 billion buyback volume in the previous two quarters.
According to previously disclosed financial reports, Berkshire Hathaway sold 49.4% of its stake in Apple Inc. in the second quarter, with its holdings plummeting from 789 million shares at the end of the first quarter to approximately 400 million shares at the end of the second quarter. At the end of the second quarter, Berkshire Hathaway's cash reserves reached a new high of $276.9 billion, compared to $189 billion at the end of the first quarter. Analysis suggests that Berkshire Hathaway's large cash holdings may indicate Buffett's concerns about the overall US economy and market.
It is worth noting that Berkshire's stock selling behavior is still ongoing. On September 10th local time, a regulatory document showed that Buffett's Berkshire Hathaway sold a total of 5.797 million shares of Bank of America stock on September 6th, 9th, and 10th, with a total value of approximately $229 million. Since mid July, Berkshire Hathaway has sold a total of 174.7 million shares of Bank of America stock, cashing out approximately $7.19 billion. At present, Berkshire Hathaway remains the largest shareholder of Bank of America, holding 858 million shares with a shareholding ratio of 11.1%.
Warren Buffett's Berkshire Hathaway has performed well in the past year, with an annualized return rate of 32%, far exceeding the S&P 500 index. And on August 28th, it became the first non tech industry American company with a market value exceeding $1 trillion. However, Buffett's recent move to reduce his holdings in Apple and Bank of America has raised concerns in the market about his long-term investment strategy. Buffett has been investing in Bank of America since 2011 and has shown confidence in the bank's recovery after the financial crisis. However, the recent stock reduction seems to contradict his previous long-term holding strategy.
According to Buffett's habit, when he starts selling a stock, he will eventually liquidate that stock. Moreover, in recent years, Berkshire Hathaway has liquidated its holdings in several banks, including United Bank of America, Wells Fargo, and Bank of New York Mellon.
According to Securities Times, market analyst and TheStreetPro columnist Doug Cass expressed concerns about Buffett's stock selling strategy, particularly the reduction of holdings in Apple and Bank of America stocks that are considered "perpetual holdings". He pointed out that Buffett significantly reduced his holdings of Apple in the second quarter of this year, selling almost half of his shares, which may be an important statement to the market, indicating that his view on the market may have changed. In addition, Cass believes that Buffett's views on the prospects of the US and global economy may be more pessimistic than he publicly expresses.
On the secondary market, since hitting a high of $727000 per share on September 4th, Berkshire Hathaway's stock price has experienced consecutive days of decline. As of the latest closing, Berkshire's Class A stock was reported at $671700 per share. The latest market value of the company is 965.1 billion US dollars.
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