Warren Buffett is withdrawing his most profitable trades in history, injecting a large amount of cash into Berkshire Hathaway's funds. However, it is currently unclear whether the "Oracle of Omaha" is prepared to use his recent huge wealth to "hunt elephants."

Warren Buffett revealed last Saturday that he continued to reduce his holdings in stocks such as Apple in the third quarter, bringing Berkshire Hathaway a profit of 97 billion USD. The company is a large industrial-insurance conglomerate controlled by Buffett since 1965.

By locking in profits, Buffett has raised Berkshire's cash level to unprecedented heights. As of now, cash represents 28% of Berkshire's asset value, reaching 325 billion USD - the highest level since at least 1990. This has also led his followers to try to figure out the motive behind selling stocks.

Some investors and analysts believe that Buffett is sticking to his principles, which he learned under the legendary value investor Benjamin Graham - first at Columbia University, and then at Graham's investment firm. They point out that Apple's relatively higher P/E ratio compared to its potential profit growth.

Apple warned investors this week that its future products may never be as profitable as the iPhone, as it is investing in the field of artificial intelligence, trying to outpace competitors including Google's parent company, Alphabet.

Others believe that considering Buffett's admiration for Apple over the years and the lack of investment opportunities, Buffett's move has other reasons. They cannot help but wonder whether Buffett is paving the way for his successor or foreseeing an impending crisis, hence the need to raise cash.

Morningstar analyst Greggory Warren pointed out, "This is really strange... It makes people wonder, 'Why is Buffett accumulating so much cash?'"

Warren stated that he does not believe Buffett is preparing to complete a large acquisition deal, which used to be a typical feature of his investment strategy, as he has faced difficulties competing with other buyers. Berkshire has also not stepped in to provide funding for large American companies like Intel, which have been seeking billions of dollars in funding to support their operations.

Buffett has also restricted purchases of other stocks this year, having only bought $5.8 billion worth of stocks by the end of September. This figure is significantly lower than the $133.2 billion in stock sales executed by Berkshire.

These sales have reduced the equity risk borne by Berkshire and provided it with sufficient liquidity to invest, a role that has already been played during past stressful periods. However, some investors feel that other reasons led to this shift.

Morningstar's Warren agreed with this, saying that this cash is likely to be used by Buffett's successor Greg Abel.

Warren said, 'Buffett has become more cautious when discussing Berkshire and the future. He knows he won't be in that position for too long. He doesn't want to leave these issues for the successor to handle.' He added, 'He hopes Greg will have more cash reserves.'

Berkshire has always maintained a large cash position, partly to meet regulatory requirements that its investment portfolio must have sufficient liquidity to pay future claims for its substantial insurance operations.

Berkshire's investment in Apple can be traced back to 2016 when the company bought less than 10 million shares worth $1.1 billion. Considering Berkshire has traditionally avoided rapidly growing technology companies, this acquisition was surprising. As early as 2012, Buffett had told shareholders that even though Apple's profitability kept increasing, he 'did not want to buy' Apple.

According to sources, the initial investment was made by Buffett's deputy Ted Weschler. Over the next few months, Buffett himself began to appreciate Apple's business model, attracted by the long time customers use iPhones and the rare willingness of people to switch to other brands after buying an iPhone.

Buffett quickly followed Weschler's lead, started buying frantically, and partnered with a small fund under Berkshire to acquire a 5.9% stake in Apple. At its peak last year, this position was valued at nearly $178 billion. Quarterly disclosures analyzed by the British Financial Times show that Berkshire spent approximately $39 billion.

Buffett's followers say there is ample reason to believe Buffett's words: he believes the return on short-term Treasury bonds is more attractive than the return on the 'marketable returns of the stock market', as he said in May.

Bill Stone, Chief Investment Officer of Glenview Trust, said, 'Since then, stocks including Apple and Bank of America have not become cheaper, things seem to be that simple.'

According to FactSet data, the current trading price of Apple's stock is over 30 times the expected earnings for the next year. Darren Pollock, fund manager at investment group Cheviot and a shareholder of Berkshire Hathaway, pointed out that when Buffett bought, this multiple was close to 12 or 13 times, and 'Apple's growth is much faster.'

Pollock added: 'When stocks are overvalued, Berkshire's cash reserves increase because Buffett finds fewer and fewer things to buy. He is not a market timer. Selling Apple stocks in an overvalued market and having so much cash is typical Buffett style.'

Investors will have to wait another three months to determine the outcome. The company noted that Buffett will share any thoughts on the matter in the annual letter to be released in February next year.