Berkshire Hathaway has reduced share buybacks, amassing a large amount of cash and Treasury bonds.

Warren Buffett's investment firm, Berkshire Hathaway, disclosed in August that after a series of substantial share repurchases in previous quarters, the recent pace of share buybacks has significantly slowed down.

According to documents, Berkshire Hathaway repurchased approximately $345 million worth of shares in the second quarter, marking the smallest quarterly repurchase since 2018.

In the second half of 2020, the company repurchased about $9 billion worth of shares each quarter.

Buffett's right-hand man is also selling shares—on Thursday, September 12th, Ajit Jain, the Vice Chairman of Berkshire Hathaway's insurance business, sold Berkshire Class A shares worth $139 million, reducing his holdings by more than half.

Do they all think Berkshire is too expensive?

On August 28th, Berkshire Hathaway's market value surpassed the $1 trillion milestone for the first time, becoming the first American company outside the tech industry to join the "trillion-dollar club."

However, joining this club does not mean a one-time achievement.

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Tesla's market value has shrunk to $736 billion, while Berkshire's current market value stands at $965.9 billion.

Amidst Buffett's substantial selling of various stocks and slowing down the repurchase of his own company's shares, Berkshire has accumulated nearly $277 billion in cash.

Many analysts believe that Berkshire's stock price is overvalued, and Buffett seems to think so too.

Bill Stone, the Chief Investment Officer of Glenview Trust, considers Berkshire Hathaway as the "ultimate safe stock"—with a rock-solid balance sheet, a trusted leader, and a widely diversified business scope.

However, he advised clients this week to wait for a pullback in Berkshire's stock price before adding more shares.

Stone said, "It's not an attractive buying opportunity right now, and frankly, we're not in a hurry to significantly increase our holdings."

In his letter to shareholders in February this year, Buffett warned that Berkshire is so large that it currently lacks acquisition targets with excellent pricing, so the company is "unlikely to have stunning performance."

Buffett often states that share buybacks can benefit shareholders—but only when conducted at the right price, which is beneficial to existing shareholders, "buying back at a premium is foolish."

In August, Berkshire also stated in its quarterly report: "The company will only conduct buybacks when Buffett believes the repurchase price is below Berkshire's conservatively estimated value."

However, high valuations do not necessarily mean that Berkshire or the overall market's upward trend will end.

As investors continue to put money into the market and avoid or ignore bad news, Berkshire's stock may continue to rise.

But for cautious investors, high valuations may make them hesitate.

Some investors say, "If Buffett doesn't buy his own stock, why should we?"

In recent months, Buffett has significantly reduced holdings in various stocks.

According to reports, Berkshire reduced its holdings in Apple by over 389 million shares in the second quarter, with a market value of about $82 billion, reducing its holdings by 49.3% from the previous quarter and decreasing its proportion in the investment portfolio by more than 10 percentage points.

Berkshire also sold out of 6.12 million shares ($840 million) of cloud computing star Snowflake; reduced its holdings by 4.37 million shares ($680 million) of Chevron; and reduced its holdings by 2.65 million shares ($367 million) of financial holding company COF... Now, Buffett doesn't even want his own stock; what does he like?

Berkshire stated that if buybacks would reduce the company's cash and Treasury holdings to below $30 billion, the company would not conduct buybacks, but this situation is almost impossible.

As of the end of June, Berkshire's cash reserves were close to $277 billion, and this huge amount of cash mainly comes from the substantial sale of stocks, especially Apple shares.

Aash Shah, the Investment Director and Senior Portfolio Manager at Summit Global Investments, said, "In summary, Buffett seems to think that the best investment right now is cash and Treasury bonds."