What signal? Buffett, a 40-year "veteran," aggressively reduces Berkshire Hathaway (BRK) holdings by more than half

According to the financial news app Zhitong Finance, documents disclosed by the U.S. Securities and Exchange Commission (SEC) show that Warren Buffett's deputy and vice chairman in charge of insurance business, Ajit Jain, has sold over half of his shares in Berkshire Hathaway (BRK.A.US). The 73-year-old "veteran" sold 200 shares of Berkshire Hathaway's Class A stock on Monday at an average price of $695,418 per share, totaling approximately $139 million.

After this sale, Jain will only hold 61 shares, while his family trust fund set up for descendants will hold 55 shares, and his non-profit organization Jain Foundation will hold 50 shares. The shares sold on Monday represent 55% of his total holdings in Berkshire Hathaway.

This move marks Jain's largest sale since joining Berkshire Hathaway in 1986. The specific reasons driving this move are currently unclear, but it is evident that he took advantage of Berkshire's recent high prices. By the end of August, the group's stock price exceeded $700,000, with a market value of $1 trillion.

David Kass, a finance professor at the University of Maryland's Robert H. Smith School of Business, commented, "This seems to be a signal that Ajit believes Berkshire's valuation is sufficient."

This is also consistent with Berkshire's recent significant slowdown in stock buyback activities. The company, headquartered in Omaha, Nebraska, repurchased only $345 million worth of stock in the second quarter, far below the $2 billion repurchase amounts in the previous two quarters.

Bill Stone, Chief Investment Officer of Glenview Trust Co. and a Berkshire shareholder, said, "I think this is at best a sign that the stock price is not cheap. A price of more than 1.6 times book value may be close to Buffett's conservative estimate of intrinsic value. I expect Berkshire will not repurchase a lot of stock at this level, if any."

Jain, a seasoned investor who has been at the helm for 40 years, has played a crucial role in Berkshire's unparalleled success. Not only has he led the company into the reinsurance industry, but he has also recently led Geico, the company's most important auto insurance business, to achieve profitability. In 2018, Jain was appointed Vice Chairman of the insurance business and a member of Berkshire's board of directors.

Buffett has also praised him, writing in his 2017 annual letter, "Ajit has created hundreds of billions of dollars of value for Berkshire shareholders. If there were another Ajit, you could swap me for him without hesitation. Make the deal!"

Before the official announcement that Greg Abel, Berkshire's vice chairman of non-insurance businesses, will eventually succeed the 94-year-old Buffett, there were rumors that Jain was likely to take over leadership of Berkshire. Buffett clarified that Jain "never thought about running Berkshire" and there is no competition between them