Cashed out 985 million! Buffett's key lieutenant made a large-scale reduction.

When risk aversion sentiment starts to heat up, holding cash becomes the best choice.

After entering 2024, Warren Buffett began significantly reducing his holdings in major stocks such as Apple and Bank of America. By the end of Q2, Berkshire Hathaway's cash reserves had surged to $276.9 billion.

Kan Jian Finance believes that although Buffett remains optimistic about companies like Apple and Bank of America, his pace of reduction is unlikely to stop in the short term. Therefore, we expect Berkshire's cash reserves to likely exceed $300 billion by the end of Q3.

Against this backdrop, Buffett's 73-year-old deputy, Ajit Jain, recently sold a large number of Berkshire Hathaway Class A shares, cashing out over $100 million.

According to documents disclosed by the U.S. Securities and Exchange Commission (SEC), Jain, Berkshire's vice chairman in charge of insurance business, sold 200 Class A shares at approximately $695,400 per share on September 9, cashing out about $139 million, equivalent to RMB 985 million.

It is reported that this sale accounted for 55% of Jain's holdings. This reduction is also the largest sale since he joined Berkshire.

Jain did not explain his motive for the sale. Some speculate that he might be preparing to leave. However, we believe that, judging from Buffett's actions, Jain may feel that Berkshire's valuation has reached a historically high level, prompting him to sell a large portion of his shares for risk aversion.

Based on Buffett's current behavior, this probability is quite high.

Records show that Ajit Jain was born in 1951.

In 1972, after graduating from the Indian Institute of Technology, Jain joined IBM's Indian data processing department as a salesperson. In 1978, he moved to the U.S. and earned an MBA from Harvard University, subsequently joining McKinsey.

In 1986, Jain joined Berkshire and took charge of its insurance business. Under his leadership, Berkshire entered the reinsurance industry and completed the transformation of auto insurer GEICO.

In 2018, Jain was appointed vice chairman of Berkshire's insurance operations and became a board member. Buffett has never been shy about praising Jain.

Buffett once said that Jain has created tens of billions of dollars in value for Berkshire shareholders. From Buffett's words, it's clear how valuable Jain is.

In fact, Jain is also one of Berkshire's highest-paid employees, earning $20 million last year.

Some analysts believe that Jain's sale of Berkshire shares could be a personal choice and does not reflect his view of Berkshire. Previously, Berkshire's market cap surpassed $1 trillion, hitting a record high.

By tenure, Jain has served for over 38 years.

In fact, judging from Buffett's recent actions, Jain's sale is not inappropriate, as Berkshire's stock price is at an all-time high.

Since Q4 last year, Buffett's pace of selling has accelerated. Additionally, after entering Q2 this year, Berkshire's buyback speed has slowed, with only about $345 million in stock repurchased in Q2. Buffett's actions undoubtedly signal his relative concern about the U.S. stock market.

It's also worth noting that Buffett may continue to accelerate stock sales in Q3, with Bank of America being one of the most heavily reduced stocks recently.

Kan Jian Finance predicts that although Buffett significantly reduced his holdings in Apple in Q2, Apple remains Berkshire's largest holding. Based on Buffett's past habits, the possibility of a complete sell-off is not small. Therefore, from this perspective, Jain may also liquidate his remaining Berkshire shares.