# Gates Foundation Dumping $11B Berkshire Stake -- What's Really Going On?

The foundation under Bill Gates sold 2.4 million shares of Berkshire stock last quarter. Sounds like not much? But this transaction involves billions of dollars and releases some very interesting signals.

**Phenomenon 1: Cash is King**

Berkshire is currently hoarding over $380 billion in cash—equivalent to a third of the company's market value. This is quite rare in Buffett's history. The current PE of the S&P 500 is around 30 times, which is twice the historical average. Even Buffett himself did not conduct any stock buybacks last quarter. To translate: Both of these big shots feel that the current valuations are a bit inflated.

**Phenomenon 2: Diversifying Risks**

Before the sell-off, Berkshire accounted for 30% of the foundation's investment portfolio. After the sell-off, it dropped to 25%. Although it is still the largest position, this move is quite obvious – near historical highs, they chose to reduce their holdings. The PB ratio of Berkshire stock (1.6 times) is also higher than the average level of the past decade (1.2-1.5 times).

**Bottom line**

This is not necessarily a panic signal. The foundation was originally supposed to allocate profits to charity. However, if both investment masters are synchronously reducing their holdings in top assets and hoarding cash, it somewhat reflects their reserved attitude towards the current market valuation.