For decades, famed value investor Warren Buffett has insisted that he does not try to "time the market." But, his recent sales could serve as a warning sign for investors amid a period of protracted valuations.

What Happened: Buffett's Berkshire Hathaway Inc (NYSE:BRK) (NYSE:BRK) has gradually wound down its largest positions over the last year.

Berkshire slashed its largest position in Apple Inc (NASDAQ:AAPL) by over two-thirds since 2023. Buffett also sold much of his position in Bank of America Corp (NYSE:BAC) since the summer. He also trimmed back nearly all of his position in Ulta Beauty Inc (NASDAQ:ULTA), an atypically short holding period for the investor who preaches investing for the long term.

The Omaha, Nebraska-based company's cash horde now stands at an astounding $325 billion.

Why it Matters: Several market experts have struggled to comprehend Buffett's thought process — is he bearish on the market at large? Reallocating his portfolio away from Apple and Bank of America to diversify? Or, as Buffett hinted at in May, anticipating a future change to U.S. tax laws?

An article from Bloomberg columnist Nir Kaissar could fuel the first theory. A post on X relayed a graph from the article showing Buffett's cash pile conspicuously rising ahead of financial crises.

As companies in the SPDR S&P 500 ETF Trust (NYSE:SPY) sustain a period of high valuations, Buffett could simply be heeding his advice, "to be fearful when others are greedy and to be greedy only when others are fearful," allocating his portfolio away from what he deems riskier investments

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