Warren Buffett’s top executive Ajit Jain sold Berkshire Hathaway stake because ‘stock fully valued business’, expert says

Berkshire Hathaway Inc. (NYSE:BRK) (NYSE:BRK) Executives have recently sold off the company’s stock significantly, raising questions about the market’s valuation. The sales, which come amid a historic market cap benchmark, could signal a change in the company’s outlook.

What happened: On Monday, it was revealed that Ajit Jainthe head of insurance at Berkshire Hathaway for nearly four decades, has sold more than half of his $139 million stake in Berkshire. This marked Jain’s biggest share sale since he joined the company in 1986.

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Those sales, which came as Berkshire’s Class A shares closed above $700,000 for the first time and the company reached a market capitalization of $1 trillion, led some to speculate that Jain would could signal that Berkshire’s stock is no longer undervalued.

Conformable Steve Checkfounder of Check Capital Management, “I think Ajit sold because the stock was fully valuing the business,” CNBC reported.

This view is also supported by Berkshire’s minimal buyback activity, which suggests that even Warren Buffett may share Jain’s perspective on ratings. Earlier this year, the legendary investor also urged caution, noting that his vast empire could only slightly exceed the average American company due to its size and limited opportunities for impact investing.

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“With our current business mix, Berkshire should do slightly better than the average American corporation, and more importantly, it should also perform with significantly less risk of permanent capital loss,” Buffett said. in his annual letter.

Buffett also reduced his stakes in some of his favorite stocks, including Bank of America and Apple. This trend, along with Berkshire’s global stock selloff, could indicate bearish sentiment in the market and valuations.

See also: This multi-billion dollar fund has invested in the next big real estate boom, here’s how you can join for $10.

Why it matters: These developments also come in the wake of Buffett’s $13 billion bet on Occidental Petroleum, which has soured, with the stock down 29% since mid-April. This has led to speculation that Buffett may buy more shares, although he is unlikely to take over the company.

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Buffett also reduced his stake Bank of Americaselling nearly $7 billion worth of stock since mid-July. This raised questions about his investment strategy with the CEO of Bank of America Brian Moynihan stating, “I don’t know exactly what he’s doing because we honestly can’t ask.”

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Expert Says Warren Buffett’s Top Executive Ajit Jain Sold Berkshire Hathaway Stake Because ‘Stock Fully Priced Business’ This article originally appeared on Benzinga.com