When the U.S. stock market hit a new high, Warren Buffett sold Apple shares to cash out, and Amazon founder Bezos also reduced his holdings of his own stocks by a large amount. What signal does this send? What is the logic?
Recently, according to the 13F position documents released by the US Securities and Exchange Commission, the content shows that Berkshire Hathaway, which is controlled by the old man Ba, reduced its holdings of 10 million shares of Apple at a high level in the fourth quarter of last year, with a cash amount of nearly 2 billion US dollars. This reduced Berkshire Hathaway's share of Apple to 5.9%. In addition, technology tycoon Bezos has also recently reduced his Amazon stock holdings and cashed out more than $2.08 billion. This is Bezos' first reduction in cash since 2021.
One is the recognized god of stocks to reduce his holdings in tech giant Apple, and the other is for the founders of tech giants to reduce their holdings of their own stocks. And at this time, the reduction of holdings coincided with the soaring market value of the six major U.S. technology giants, and the U.S. stock market continued to hit new highs after hitting new highs. This is a very unusual signal! What exactly is the signal being released? What is the logic behind it? In my opinion, there may be several considerations that cannot be bypassed.
First, the market value of technology giants such as Apple and Amazon is at a historical high, and it is difficult to sustain rapid growth in the future. At present, Apple's market capitalization ranks second in the world, second only to Microsoft, with a high of 2.8 trillion US dollars, equivalent to more than 20 trillion yuan. Amazon's market capitalization ranks fifth in the world, with a market value of 1.8 trillion US dollars, equivalent to more than 13 trillion yuan. The combined market value of these two companies is almost equal to nearly half of the entire market value of our A-shares. Apple's main core products are mobile phones, computers and other electronic products, and in recent years, with the failure of Moore's law, Apple's innovation has weakened, and the competition of external high-end models such as Huawei has intensified, and it will be difficult for Apple to maintain the rapid growth rate in the early stage in the future. This can be seen from Apple's financial reports in recent years, both revenue and net profit in 2023 will decline year-on-year. Amazon's main revenue still comes from online shopping, although cloud services continue to develop, but the future growth is still full of risks. As long as the earnings report is thunderous and the growth is less than expected, the U.S. stock technology bubble will inevitably burst. This is one of them.
Second, the Federal Reserve postponed the expectation of interest rate cuts, and the U.S. economy came under pressure. Due to the relatively stubborn inflation and the Fed's desire to suppress competitors such as China by maintaining a high interest rate policy, the Fed has repeatedly postponed the expectation of interest rate cuts. The probability of a rate cut in March and May this year is low. And the high-interest rate policy is a double-edged sword, not only hurting others but also hurting yourself. Now it's just a bet on who can hold up. Just like China's Seven Wounds Fist, although it has strong lethality, it will hurt the enemy by ten points, and the self-damage will also reach seven points. So as long as the U.S. economy is eaten up, then the correction of high-valued U.S. stocks is not far off. This is the second one.
Third, the rapid development of artificial intelligence. In the past year, breakthroughs in large models such as artificial intelligence have paved the way for future technological trends. Therefore, Nvidia's stock price skyrocketed, overtaking Meta, Amazon, and Google all the way to ranking third in the world. The rapid and deterministic development of artificial intelligence technology such as Nvidia will inevitably have a substitution impact on traditional technology giants such as Apple and Amazon, which is the third point.
Therefore, the logic of the reduction of stock god Warren Buffett and technology tycoon Bezos is inseparable from the above three reasons.