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Buffett is recognized as the "stock god" in the global capital market. His status as the stock god has been firmly established for a long time, mainly due to his high investment success rate and the huge amount of funds he holds that influence the direction of the capital market. Over the years, Buffett has invested heavily in Apple, Occidental Petroleum and other stocks, and each large transaction has attracted much attention.

Since 2016, Buffett has invested more and more in Apple, which has become a major holding of Berkshire Hathaway. However, since last year, Buffett's investment attitude towards Apple has begun to change.

Buffett's Berkshire Hathaway significantly reduced its holdings of Apple shares in the second quarter, with the reduction reaching nearly 50%.

As a major holding of Berkshire Hathaway's equity investment, Apple has also been heavily sold by Buffett. In addition to Apple, Berkshire Hathaway has also sold off other listed companies including Bank of America.

After a series of share reduction actions, Berkshire Hathaway's cash reserves have increased significantly. After Berkshire Hathaway reduced its holdings of Apple shares by 50%, Berkshire Hathaway's cash reserves have become more abundant and its risk defense capabilities have also been greatly improved.

Buffett's efforts to reduce his holdings in Apple were not small. He reduced his holdings of nearly 400 million shares of Apple, and the amount of cash he cashed out was as high as hundreds of billions of yuan. From the performance of Apple's stock price, it also showed a sharp decline due to Buffett's reduction of holdings. Recently, Apple's stock price even fell below $200.

As of the end of the second quarter, Berkshire Hathaway's cash reserves were US$276.9 billion, compared with US$189 billion at the end of the first quarter, which means that Berkshire Hathaway's cash reserves hit a new record high.

From reducing its holdings in Apple, Bank of America and other listed companies, it can be seen that Berkshire Hathaway's investment strategy has become more cautious. The record high of cash reserves also shows that Buffett's defensive ability has been further improved.

Based on historical data analysis, the size of Berkshire Hathaway's cash reserves can be regarded as an important indicator of market conditions.

In fact, from Buffett's perspective, on the one hand, by selling equity, he can recover funds and increase the size of cash reserves. On the other hand, he can realize the preservation and appreciation of assets through cash assets. Because the current U.S. Treasury bond interest rates and deposit rates are still at historical high levels, holding huge cash assets can also bring about the effect of asset preservation and appreciation.

In addition, this strategy can also make full preparations for the next step of layout. On the one hand, it can realize asset preservation and appreciation through cash assets, and on the other hand, it can improve capital utilization and provide more abundant liquidity support for finding the next high-quality asset.

Buffett's investment moves are always based on deep considerations. From historical data, although Buffett has made mistakes, the number of mistakes is only a very low percentage. From the previous cases of escaping the top, most of Buffett's cases of escaping the top are relatively successful.

Why would the stock god choose to sell off Apple and other stocks in large quantities at this time?

Hypothesis one: the current market valuation level is relatively high, and the valuation levels and profitability of assets including Apple and Bank of America may no longer meet the stock god's stock selection criteria.

Hypothesis two, the stock god may be worried about the increase in capital gains tax in the future. The stock god hopes to sell a large number of stocks when the capital gains tax is lower to avoid a reduction in investment profits due to the increase in capital gains tax.

Hypothesis three, the stock god may think that there will be a risk of drastic fluctuations in the future market, and he may improve his risk resistance by significantly reducing holdings of heavily invested stocks, accelerating the return of funds, and increasing cash reserves, in order to prepare for the risk of asset price fluctuations that may occur in the future.

Hypothesis four: The stock god may have found other cost-effective investment directions to provide a steady source of funds for the next transaction.

Buffett sold off a large amount of Apple shares in the second quarter, perhaps considering that his shareholding ratio in Apple was too high, and he balanced his holdings by reducing his holdings significantly. Moreover, Buffett has already made very rich investment profits from his investment in Apple, and reducing his holdings of Apple shares at a high level is also a need to recover funds and balance his holdings.