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Buffett willappleHoldings were drastically cut in half, and cash holdings hit a new high, which attracted attention. Musk also expressed his own views and took the opportunity to criticize the Federal Reserve.

Musk responded to a post on X this week:

He (Buffett) obviously expects some kind of pullback or simply doesn't see any better investments than U.S. Treasuries.

The Fed needs to cut rates, they would be foolish not to.

Although Buffett has praised Apple many times, the scale of the current reduction has shocked the market. As we all know, Buffett is famous for his value investment philosophy, and valuation may be one of the factors in his decision.

At the 2024 shareholders meeting, Buffett said Apple is "very likely" to still be a top 100 company at the end of 2024.BerkshireThe largest position, and it isAmerican ExpressorCoca ColaBetter business.

Wall Street investment bank Bernstein pointed out that although Buffett publicly praised Apple, he has always been very sensitive to valuations, increasing his positions when the price-to-earnings ratio was close to 20 times and reducing his holdings when it exceeded 30 times.

Historically in the technology sector, once Buffett starts to reduce his holdings, he usually sells out completely fairly quickly. Buffett almost completely sold out in four quarters.IBMof positions, fully exited within 3 quartersHPposition.

For Apple, he also showed obvious sensitivity to valuation, establishing most of his positions when the price-to-earnings ratio was below 15 times, selectively increasing his holdings when the price-to-earnings ratio was 20 times or below, and reducing his holdings when it was above 30 times. Last quarter, Apple's average price-to-earnings ratio was 30 times.

As of the end of the second quarter, Buffett still owned 395 million shares of Apple, and the company's average daily trading volume was about 60 million to 70 million shares. Buffett's second largest position wasBank of America, he has $41 billion. So if he reduces his Apple position to the same size as Bank of America by the end of the year, it would be equivalent to about 2% of the stock's daily trading volume, and Buffett's sales last quarter were equivalent to 8% of Apple's trading volume.

In addition, Bernstein also warned that in addition to Buffett's 50% reduction in Apple's shares, the market's concerns also include the US Department of Justice's ruling on Google's monopoly and the market's general concerns about the economic recession and technology stock valuations.