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In the world investment market, the stock god Buffett is undoubtedly a very special existence. Basically, stock investors all over the world are very familiar with Buffett's operating logic of crossing the river. However, Buffett's recent series of actions have made people somewhat confused. He significantly reduced his holdings of Apple stock and even halved his holdings. With such a large-scale reduction, what exactly does Buffett want to do?

1. Buffett significantly reduced his holdings in Apple

According to a report by Times Finance, the second quarter financial report released by Berkshire Hathaway, a company owned by Buffett, showed that it had reduced its holdings of Apple shares by more than half, and the book value of its Apple shares had fallen by 51.69%.

Apple, American Express and Coca-Cola have always been Buffett's major holdings, bringing him rich returns. As for the reason for reducing holdings, Buffett believes that if the US government wants to make up for the rising fiscal deficit and increase capital gains tax, then "selling a small amount of Apple" will benefit shareholders in the long run.

According to the financial report, as of June 30, the book value of Berkshire's Apple shares was $84.2 billion, down $51.2 billion from $135.4 billion at the end of March. Since the beginning of this year, it has reduced its holdings of Apple shares by more than half, and the book value of its Apple shares has dropped by 51.69%.

Berkshire Hathaway has continued to increase its holdings of Apple shares since it began buying the company's shares in 2016. According to media reports, Apple has long been the company's largest holding, bringing in more than $100 billion in returns.

In the first quarter of this year, Berkshire Hathaway reduced its holdings of Apple by about 13%, and hinted at the company's annual meeting in May that this was for tax reasons. Buffett pointed out at the time that if the US government wants to make up for the rising fiscal deficit and increase capital gains taxes, then "selling a small amount of Apple" will benefit shareholders in the long run. At the same time, he also believes that holding Apple is not just holding stocks, but treating it as a business, just like holding Coca-Cola and American Express.

In the second quarter, Berkshire Hathaway continued to significantly reduce its holdings in Apple.

2. What does the stock god want to do when his holdings are cut in half?

Buffett is a legendary investor known as the "God of Stocks". Every investment decision he makes has attracted the attention of investors around the world. Recently, Buffett has significantly reduced his holdings of Apple shares, almost halving his position. This move has triggered widespread speculation and in-depth discussions in the market. What exactly prompted Buffett to make such a decision?

First, since 2016, Buffett has purchased a large number of Apple shares through his Berkshire Hathaway. This investment has brought him a return of more than $100 billion, which can be regarded as a classic case in the history of investment. However, the investment market is ever-changing, and there are no stocks that will always rise. Timely profit-taking is a manifestation of investment wisdom. Buffett's reduction of Apple shares can be seen as his strategy to lock in profits at high levels and conduct risk management. After Apple's stock price reached a certain height, Buffett chose to reduce his holdings, which was both a lock in of previous investment returns and an avoidance of potential market risks.

Secondly, the current US tax policy is gradually shifting towards increasing capital gains tax, which is undoubtedly an important consideration for investors such as Buffett. Buffett once said at the shareholders' meeting that the expectation of a possible increase in US tax rates prompted him to take some profits on Apple's position. Currently, the capital gains tax rate is low, but with changes in policies, the tax rate may increase in the future. Therefore, reducing some stocks before the tax rate increases can reduce future tax costs, which is in line with Buffett's financial planning.

In addition, Buffett also mentioned that by reducing his holdings of Apple shares, he can achieve tax savings to a certain extent. Since capital gains tax is calculated based on the income when the asset is sold, selling some shares when the tax rate is lower can reduce future tax pressure. Although Buffett emphasized at the shareholders' meeting that this was a "superficial reason" or "excuse", it is undeniable that tax factors did play an important role in his decision to reduce holdings.

Third, as a global technology giant, Apple's performance and growth potential have always attracted much attention. However, in recent years, Apple's growth rate has slowed down significantly, especially the sales and market share of its mainstream product iPhone have become saturated. In developed markets, the penetration rate of iPhone is already very high, and the growth space is limited; in emerging markets, although there is still a certain growth potential, it is affected by economic, political and other factors, and growth also faces many challenges.

In addition, although Apple has invested heavily in cutting-edge technologies such as AI, there is still uncertainty as to whether it can be successfully transformed into a new growth point. Buffett has always emphasized the predictability and certainty of investment, and he is obviously cautious about fields like AI that are full of variables. Therefore, with Apple's growth potential weakening and its future prospects uncertain, Buffett chose to reduce his holdings of some stocks to avoid potential risks.

Fourth, Buffett's investment philosophy emphasizes value investment and long-term holding, but at the same time, he is also a keen observer of market changes. Reducing holdings of Apple shares not only reflects his judgment on Apple's current situation, but may also be a signal to the market that he is more cautious about the valuation and growth prospects of technology stocks. This move is both a warning and a revelation to investors, suggesting that in the context of high valuations of technology stocks, it is necessary to more carefully assess investment risks.