Suddenly! Buffett's deputy sold off heavily, nearly 1 billion yuan
六月清晨搅
发表于 2024-9-21 17:38:30
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The Indian Vice President suddenly sold nearly 1 billion yuan worth of stocks!
China Foundation News reporter Amman
Recently, the US Securities and Exchange Commission disclosed a heavyweight news: Ajit Jain, the Indian American who is in charge of core insurance business and vice president of Berkshire Hathaway Group under Warren Buffett, sold more than half of his holdings of Berkshire's Class A shares.
It is reported that Ajit sold 200 Class A shares of Berkshire Hathaway held by himself and his family trust for $695417.65 on September 9th, cashing out a total of $139 million (approximately RMB 990 million).
According to Wind data, Berkshire's Class A stock is the most expensive stock in the world, with a price surge of over $727000 per share at the beginning of this month, followed by a continuous decline. As of now, it has closed at $672000 per share.
Ajit himself refused to explain the reason for the operation, and Berkshire also adheres to its usual mysterious and low-key style, and has not responded to this.
[align center] Follow Buffett for 38 years
[align center] was once seen as Buffett's successor
Ajit Jahn, 73 years old, is one of the main aides of the "stock god" Buffett. Since 1986, he joined Berkshire Hathaway and has been following Buffett for 38 years.
Ajit was born in India in 1951 and graduated from the Indian Institute of Technology in 1972 with a Bachelor's degree in Mechanical Engineering; After graduating from university, Ajit joined IBM India's data processing department as a salesperson; In 1978, Ajit moved to the United States and obtained a Master's degree in Business Administration from Harvard University. Later, he joined the renowned consulting firm McKinsey.
In 1986, he officially resigned from McKinsey and followed Buffett. At that time, Berkshire Hathaway was a textile company and no one had experience in insurance business. Ajit led the team from scratch, Berkshire successfully entered the reinsurance industry, and completed the transformation of car insurance company GEICO, building Berkshire into an insurance empire.
In 2014, Buffett publicly stated in a shareholder letter that Ajit and Abel were both excellent successors, and now both have become vice presidents of Berkshire Hathaway Group: Ajit manages the insurance business, creating hundreds of billions of dollars in cash flow for the investment business; Abel is in charge of all subsidiaries of Berkshire Hathaway Investments, responsible for converting the cash generated by the insurance industry into high investment returns.
Buffett has always praised Ajit's abilities, stating at the 2017 shareholders' meeting that Ajit's value to the company exceeds his own. He once joked that if he (Buffett), Charlie Munger, and Ajit all fell into the water at the same time, the best way to survive was to swim behind Ajit.
In 2018, Ajit was appointed as the Vice Chairman of Berkshire Hathaway's insurance business and appointed as a member of Berkshire Hathaway's board of directors.
This sell-off is also Ajit's largest sell-off since joining Berkshire Hathaway in 1986. After this sale, Ajit will directly hold 61 shares of Berkshire's Class A shares, and he and his spouse will hold 55 shares in the family trust fund established for their descendants. In addition, his non-profit company Jain Foundation also holds 50 shares.
Does Buffett also think Berkshire Hathaway's stock is expensive?
Ajit's sell-off sparked heated discussions in the market. Some market participants speculate that this is a precursor to Ajit's resignation. But more market participants estimate that he may have cashed out at a high level. Since the beginning of this year, Buffett's statements on multiple occasions have hinted that 'Berkshire Hathaway's stocks are too expensive'.
Since the beginning of this year, Buffett has been reducing his holdings of various stocks and accumulating a large amount of cash reserves. Meanwhile, Buffett has also slowed down the repurchase of his own stocks.
Data shows that Berkshire Hathaway only repurchased stocks worth $345 million in the second quarter, far lower than the $2 billion repurchase volume in the previous two quarters.
Buffett warned in a letter to shareholders in February this year that Berkshire Hathaway is large in scale and currently lacks well priced buyable companies, so the company "cannot have astonishing performance".
Buffett often states that stock repurchases can benefit shareholders - but only repurchasing at an appropriate price is beneficial for existing shareholders, and "buying at a premium is foolish. In August, Berkshire Hathaway also stated in its quarterly report that "the company will only repurchase if Buffett believes the repurchase price is lower than Berkshire's conservative estimate of value
Now that Buffett doesn't even want his own stocks, what does he like? As of the end of June, Berkshire Hathaway's cash reserves were close to $277 billion, mainly from the sale of a large number of stocks, especially Apple stock.
Aash Shah, investment director and senior portfolio manager of Summit Global Investments, said: "In a word, Buffett seems to think that the best investments at present are cash and treasury bond bonds."
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