"Oracle of Omaha" Warren Buffett's latest stock holdings have been revealed.

On August 14th local time, on the last day of the statutory reporting period, Berkshire Hathaway released its U.S. stock holdings report for the second quarter (Form 13F) after the market closed.

Buffett's market moves have always been closely watched by investors. The 13F filing shows that in the second quarter, Berkshire Hathaway significantly reduced its holdings by 389 million shares of Apple, with Apple's share of the portfolio plummeting by 49.3% quarter-over-quarter. In addition to Apple, Buffett reduced his holdings in Chevron and T-Mobile, and completely sold out of Snowflake and Paramount. On the side of increasing holdings, Berkshire Hathaway continued to buy Occidental Petroleum and the "mysterious European stock" announced in the first quarter, Allianz, and also established positions in beauty company Ulta Beauty and aerospace and defense supplier HEICO.

After the release of the 13F form, HEICO's U.S. stock rose nearly 5% before the market opened, Ulta Beauty rose more than 15% before the market opened, Apple rose slightly by 0.33% before the market opened, and the stock prices of Occidental Petroleum and Allianz were relatively stable, seemingly not affected by the news.

As of the end of the second quarter, Buffett's top ten holdings are Apple, Bank of America, American Express, Coca-Cola, Chevron, Occidental Petroleum, Kraft Heinz, Moody's, Allianz, and DaVita HealthCare.

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It is worth noting that Berkshire Hathaway's cash reserves have reached an all-time high. With continuous portfolio adjustments, Berkshire Hathaway's stock positions have declined for three consecutive quarters, with the total market value of holdings falling from $332 billion to $280 billion. In contrast, the position of cash and equivalents has soared, with cash reserves reaching $277 billion, setting a new historical high.

Why the aggressive selling of Apple shares?

Since the beginning of this year, Buffett has been aggressively selling Apple shares. In the first quarter, Berkshire Hathaway sold 120 million shares of Apple, and in the second quarter, it further sold about 390 million shares. To date, Berkshire Hathaway has sold Apple shares worth more than $85 billion, and still holds about 400 million shares of Apple, reducing its share in the investment portfolio to 30.52%, with a reduction of 56%.

In 2016, Buffett first established a position in Apple when the stock price was around $26 per share, and now Apple's stock price has soared to about $221, with a stock price increase of over 800%. Selling Apple at a high price is bringing in a huge income for Berkshire Hathaway. Financial reports show that Berkshire Hathaway's cash has increased from $189 billion at the end of the first quarter to $278 billion in the second quarter, with the vast majority of the gains coming from the sale of Apple shares.The market is curious about why Buffett would sell off Apple shares aggressively this year. In May, Buffett responded at the shareholders' meeting, saying that the main consideration was tax-related, not any negative judgment on the long-term prospects of Apple's stock. He hinted that the current decision to reduce holdings was related to his expectation of potential future tax rate increases, as the U.S. government might raise federal tax rates to alleviate the ever-expanding fiscal deficit.

Buffett's decision to significantly cut Apple is apparently not only about taxes. Zhang Zhuran, a macro researcher at Mao Tou Ying Gong She, explained to a reporter from 21st Century Economic Report that Buffett's sale of Apple can be seen as a return to his personal investment style. Buffett has always been very cautious about investing in tech stocks. For example, in the 1990s, he never bought Microsoft shares. Berkshire's investment portfolio also reflects that compared to tech stocks, Buffett always favors traditional industries that can generate stable returns. He believes that if he cannot see through the high-tech industry, he simply does not buy or adopts a conservative strategy. This year, with the sharp rise in the stock prices of tech stocks like Apple, Buffett's decision to reduce holdings may be related to Apple's overvaluation, selling for profit and then investing the funds into cheaper assets.

Darren Pollock, portfolio manager at Los Angeles-based investment firm Cheviot Value Management, said, "Apple is still a great company, but valuation is important. I am relieved to see Buffett selling off such a large amount."

Cash reserves hit a new high.

Looking at Berkshire's holdings, it seems that Buffett is turning to a "cash is king" strategy.

Over the past seven quarters, Buffett and his investment "deputies" Weschler and Combs have been reducing their holdings in U.S. stocks. Currently, Berkshire's stock position has been sharply reduced to about 52%, a significant decrease of 15% from the first quarter. In addition to significantly reducing holdings in Apple, although not shown in the 13F table, according to regulatory filings from the past few weeks, Berkshire also began selling its second-largest holding, Bank of America, in the third quarter, reducing holdings by more than 90 million shares in nearly a month.

As a result, Berkshire's cash reserves continue to swell. Positive cash flow from operations, coupled with the proceeds from the sale of Apple and Bank of America in recent months, has set a historical high of $277 billion in cash assets on Berkshire's books.

Bao Lihua, director of equity investment at Yi Mi Fund, analyzed to a reporter from 21st Century Economic Report that, on the one hand, Buffett's sale of nearly half of Apple's shares is related to Apple's PE level of more than 30 times. Although it is not a bubble, the valuation is also on the high side. On the other hand, the large amount of cash from selling Apple has reached its highest level since 2005, which is also a precautionary measure, reflecting Buffett's cautious attitude towards the global macroeconomy.

According to Berkshire's latest financial report, as of the end of the second quarter, it held $234.6 billion in short-term U.S. Treasury bonds and had more than $42 billion in cash and cash equivalents, including U.S. Treasury bonds with a maturity of three months or less.

Apart from risk aversion, Zhang Zhuran said that Buffett's accumulation of Treasury bonds is also related to the bond prices being at a low point within the year. Over the past year, the 3-month U.S. Treasury bond has fallen by 4%, and the 1-year Treasury bond has fallen by 17%, creating opportunities to buy low. Despite market concerns about the scale of U.S. debt, U.S. sovereign bonds still have almost no default risk and can continue to generate a stable cash flow.Who is the "Heart's Choice" of Institutions?

Buffett, as a global investor and opinion leader, naturally attracts attention for his "strict selection" of stocks.

According to the 13F form, Buffett increased his holdings in Occidental Petroleum and AIG, and established new positions in Ulta Beauty and Heico Aerospace.

In Zhang Zhuran's view, Buffett's purchase of company stocks in the energy, beauty consumer, and defense industries is related to his personal preference for investing in traditional industries. At the same time, the stock prices of Occidental Petroleum and Ulta Beauty are currently at a low level, which fits Buffett's concept of buying assets at a low price and long-term value investment.

However, Bao Lihua pointed out that, except for Apple, Berkshire Hathaway's increase or decrease in holdings or new positions in the second quarter accounted for less than 1% of its stock portfolio, and many even less than 0.1%, which does not have much interpretive significance.

Recently, in addition to Berkshire Hathaway, a number of other asset management giants have also released their second-quarter holdings reports.

Bridgewater Fund reduced its holdings of Nvidia by 489,000 shares and Google by 828,000 shares in the second quarter, and sold nearly 75% of its Apple holdings to 469,000 shares; it increased its holdings in Amazon by 1.59 million shares and Microsoft by 510,000 shares.

HHLR Advisors, an independent fund management platform under Hillhouse that focuses on secondary market investments, has newly entered and increased its holdings in internet Chinese concept stock companies such as Alibaba, Vipshop, NetEase, and Ctrip, while reducing its holdings in Pinduoduo, Amazon, Microsoft, Danaher, and Beike, and clearing out companies like AMD.

BlackRock increased its holdings in the seven major US technology stocks in the second quarter, with an increase of 16.88 million shares in Nvidia, 9.69 million shares in Apple, and nearly 9 million shares in Microsoft; it reduced its holdings in Broadcom and Berkshire Hathaway.

From this, one can see where the "smart money" is flowing.In Bao Lihua's view, by examining the 13F reports of numerous asset management giants, one can observe both similarities and stark contrasts in their operational strategies. For instance, regarding Apple, both Bridgewater and Duan Yongping have synchronized their share reductions. However, Bridgewater's holdings are diversified, with nearly 400 stocks in total, and its holding proportion in Apple was never high to begin with, around 1% to 2%. The reduction might be more based on a macro hedging strategy. Duan Yongping seems to favor Apple more than Warren Buffett, with a holding ratio as high as 80%. Although the absolute number of shares he holds in Apple has decreased, due to the increase in Apple's market value in the second quarter, his holding ratio in Apple has actually slightly increased. Meanwhile, Jinglin, Hillhouse, and the Norwegian Sovereign Wealth Fund continued to increase their holdings in Apple in the second quarter.

In terms of investments in Chinese concept stocks, Bao Lihua added that Hillhouse significantly increased its holdings in the second quarter. Although Pinduoduo remains its largest holding, the holding ratio has been reduced. At the same time, Hillhouse substantially increased its stakes in Alibaba and Vipshop, accounting for 6% and 3% respectively. This investment move is also noteworthy.