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recently, the news that buffett's deputy reduced his holdings in berkshire shares has caused heated discussions in the capital market!

a latest regulatory filing shows that ajit jain, one of buffett's main deputies, berkshire vice chairman and head of insurance business, sold more than half of his holdings of berkshire class a shares, cashing in about us$139 million (equivalent to rmb 990 million), accounting for 55% of his holdings.

the document did not mention the specific reason for the sale, but market analysts believe that this to some extent reflects the overvaluation of berkshire's stock. in addition, there are speculations that ajit jain, who has followed buffett for nearly 40 years and made great contributions to the development of berkshire, may be preparing to leave.

unexpected sell-off, what does it signal?

documents disclosed by the u.s. securities and exchange commission (sec) show that ajit jain, one of buffett's main deputies and vice chairman of berkshire and in charge of insurance business, sold 200 berkshire class a shares at a price of about $695,400 per share on september 9, cashing in about $139 million. the shares sold this time accounted for 55% of ajit jain's total berkshire shares.

after the sales, jain directly owns 61 berkshire class a shares, a family trust he and his spouse set up for their descendants owns 55 shares, and his nonprofit jain foundation owns 50 shares.

this is also the largest sale by jain since he joined berkshire in 1986. at present, it is not clear why he sold the shares, but he did take advantage of berkshire's recent high stock price.

by the end of august, the group's stock price exceeded $700,000, with a market value of $1 trillion. jain's selling came five days after berkshire's stock price exceeded $727,000 and less than two weeks after its market value exceeded $1 trillion for the first time.

“this seems to suggest that jain believes berkshire’s valuation has reached its highest level,” said david kass, a finance professor at the university of maryland’s robert h. smith school of business.

this is also consistent with berkshire's recent significant slowdown in stock repurchase activity. berkshire repurchased only $345 million worth of shares in the second quarter, far lower than the $2 billion repurchased in the previous two quarters.

according to the previously disclosed financial report, berkshire sold 49.4% of its shares in apple in the second quarter, and the number of shares held dropped from 789 million shares at the end of the first quarter to about 400 million shares at the end of the second quarter. at the end of the second quarter, berkshire's cash reserves reached $276.9 billion, a new high, while at the end of the first quarter it was $189 billion. some analysts pointed out that the huge amount of cash held by berkshire may indicate buffett's concerns about the overall us economy and market.

it is worth noting that berkshire's stock selling behavior is still ongoing. on september 10, local time, a regulatory document showed that buffett's berkshire sold a total of 5.797 million shares of bank of america on september 6, september 9, and september 10, with a total value of approximately us$229 million. since mid-july, berkshire has sold a total of 174.7 million shares of bank of america, cashing in approximately us$7.19 billion. currently, berkshire is still the largest shareholder of bank of america, holding 858 million shares, accounting for 11.1% of the shares.

buffett's "big disciple"

ajit jain, 73, is one of the main deputies of "oracle of omaha" buffett and has followed buffett for nearly 40 years.

jain was born in india in 1951 and graduated from the indian institute of technology in 1972 with a bachelor's degree in mechanical engineering. after graduating from university, jain joined ibm india's data processing department as a salesperson. in 1978, jain moved to the united states and obtained a master's degree in business administration from harvard university. he then joined the well-known consulting firm mckinsey.

in 1986, jain joined berkshire to be responsible for the group's insurance business. under jain's leadership, berkshire successfully entered the reinsurance industry and completed the transformation of auto insurance company geico. in 2018, jain was appointed vice chairman of berkshire's insurance business and was appointed to the berkshire board of directors.

buffett has nothing but praise for jain. buffett once said: "jain has created tens of billions of dollars of value for berkshire shareholders. if he (buffett), jain and the late vice chairman charlie munger were on a sinking ship and only one person could be saved, please swim to jain."

jain was rumored to be in line to lead berkshire before it was officially announced that greg abel, 62, berkshire's vice chairman of non-insurance businesses, would eventually take over from buffett, 94. buffett clarified that jain "never thought about running berkshire" and there was no competition between the two.

jain is one of berkshire's highest-paid employees, making $20 million last year. still, his wealth pales in comparison to that of buffett, whose wealth is primarily held in berkshire stock.

cathy seifert, an analyst at cfra research who rates berkshire a "buy," said jain's selling of berkshire may reflect his personal circumstances rather than his views on berkshire's prospects. "those of us who have been following berkshire for a long time suspect that the insurance business may be changing," seifert said. "my sense is that he may be moving on, and i doubt that's the reasoning behind his stock sales."

so far, jain has not publicly responded to the issue of reducing his holdings. it is estimated that he may cash out at a high price or prepare to retire. berkshire's stock price has risen by more than 23% this year, outperforming the s&p 500 index and growth stocks. at the end of august this year, berkshire's market value exceeded $1 trillion. bill stone, chief investment officer of glenview trust and a major shareholder of berkshire, said that ajit's selling behavior "at best reflects what everyone generally knows, that berkshire's stock price has indeed been a bit high recently."

in addition, even though jain is younger than 94-year-old buffett, he is actually 73 years old. buffett once said that greg abel could take over at any time, and the outside world is also concerned about whether jain will leave and cause a shock once greg abel officially takes over.

in the secondary market, berkshire's stock price has been falling for several consecutive days since it hit a high of $727,000 per share on september 4. as of the latest closing, berkshire's class a shares were reported at $671,700 per share. the company's latest market value is $965.1 billion.