Berkshire Hathaway Inc. BRK BRK executives have recently made significant sales of the company’s stock, raising questions about the market’s valuation. The sales, which come amid a historic market cap milestone, could indicate a shift in the company’s outlook.

What Happened: On Monday, it was revealed that Ajit Jain, the insurance chief at Berkshire Hathaway for nearly four decades, sold over half of his Berkshire stake, amounting to $139 million. This marked Jain’s largest stock sale since joining the company in 1986.

These sales, which occurred as Berkshire’s Class A stock closed above $700,000 for the first time and the company reached a $1 trillion market cap, have led some to speculate that Jain may be signaling that Berkshire shares are no longer undervalued.

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According to Steve Check, founder of Check Capital Management, “I think Ajit sold because the stock was fully pricing the business,” reported CNBC.

This view is further supported by Berkshire’s minimal buyback activity, which suggests that even Warren Buffett may share Jain’s perspective on valuations. Earlier this year, the legendary investor also urged caution, noting that his vast empire may only slightly outperform the average American company due to its size and limited impactful investment opportunities. “With our present mix of businesses, Berkshire should do a bit better than the average American corporation and, more important, should also operate with materially less risk of permanent loss of capital,” Buffett stated in his annual letter.

Buffett has also been reducing his stakes in some of his favorite stocks, including Bank of America and Apple. This trend, along with the overall sales of stocks by Berkshire, could indicate a bearish sentiment on the market and valuations.

Why It Matters: These developments also come in the wake of Buffett’s $13 billion bet on Occidental Petroleum turning sour, with shares plummeting 29% since mid-April. This has led to speculation that Buffett might buy more shares, although he is unlikely to take over the company.

Buffett has also been reducing his stake in Bank of America, selling nearly $7 billion worth of shares since mid-July. This has raised questions about his investment strategy, with Bank of America CEO Brian Moynihan stating, “I don’t know what exactly he is doing because frankly we can’t ask.”

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