janusdr

No idea why the Bloomstran guy on twitter is talking about a gift. On all previous small stock gifts, this was specifically mentioned in the sec form. Now it says explicitly that it's a sale on 1 date at a specific average stock price.

Indeed, his real estate purchases were all less than his annual salary. Would be strange to splurge half his net worth now, without a word. (A Bloomberg journalist got him on the phone, but he refused to give an explanation.) Not a US tax specialist, but with regards to the taxes, it is for sure a federal long term capital gain, so taxed at 20% max. Which Harris wants to put at 28%. Not to sniff at 8%, but I don't think these decade long Berkshire holders would time their stock transactions around a (potential) 8% extra tax? It seems to me that a big overvaluation is the most important reason. But since Buffett was still buying at 420 in recent quarters (before he stopped in the beginning of June), that means that 465 was around intrinsic value at that time. Something must have happened that Buffett stopped buying afterwards (even at 400-405), and Ajit is even a major seller now at 463. Maybe his realtime reports of some of the subsidiaries foreshadow trouble incoming for the economy. Don't forget he is the master market timer 1969 closure of his fund, 1974 oversexed man in a whorehouse, 1987 fully in bonds just before the crash, 1999 november Fortune warning, 2008 october 'buy American', etc. Now stopped to buy Berkshire while he bought it higher before; selling his top 2 positions Apple and Bank of America like a maniac; No more Oxy buys while he bought until last june at higher prices; Ajit selling a major stake. I think Berkshire could be at more than 50% cash in the public portfolio by now. That is a really a lot by Berkshire standards. All this does feel... signally.

It can't be personal and company specific (planned retirement in the short term, etc.) because then Buffett would want to have that disclosed first to avoid a perception of frontrunning the news. It can't be charity related or shares would have been gifted. It can't be estate related or shares would just have been gifted/pledged. It could be to buy something expensive like a house. But he could just have mentioned this in 1 short sentence ('proceeds are to finance a personal outlay') , and nobody would care and speculation would stop. Secondly I don't think Ajit is a guy who buys trophy houses or jets for half his net worth at 73 years old, after not having done that for 40 years. The only reason left is that Berkshire is very overvalued. But even then it is strange, because neither Buffett nor Abel have sold a substantial amount of Berkshire shares, not now and not in the past when it was fully valued. But Buffett is the personification of Berkshire, and Abel is the next CEO so for them it is probably not done to start market timing their own stock. Ajit may have less of a problem in that respect. He is also a lot less rich. (didn't have the MidAmerican stake). Berkshire did stop buying back Berkshire shares in the last 2,5 months, even at prices in the low 400's, where he was buying in q1 and q2. I still think Buffett sees something coming in the economy. And Ajit sees it as well, and pushed the button when Berkshire ran up almost 20% in the past 2 months.

What I heard on the annual meeting is that he said 'chances are very high that Apple still is his biggest position at the end of the year'. There is only 1 scenario in which he would keep the possibility open that Apple wouldn't be his biggest position, and that is the scenario in which continues to sell as much as he can. So that remains my base case.