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" Luke Sharrett/Bloomberg
Berkshire Hathaway Vice Chairman Ajit Jain sold $139 million of Berkshire stock on Monday, reducing his ownership in the company by more than 50%, a sale that could be viewed negatively by investors.
Jain, a Berkshire vice chairman and head of the company’s large insurance operations, sold 200 Berkshire Class A shares at an average price of $695,418 on Monday, according to a Form 4 filing with the Securities and Exchange Commission late Wednesday.
Jain sold the Berkshire stock near the recent peak of around $725,000 per class A share.
Jain had one of the largest Berkshire holdings among the company’s directors and executives. He now holds 61 Class A shares directly and another 55 A shares through trusts established by himself and his spouse for their descendants, for a total of 116 shares, according to the filing. The nonprofit Jain Foundation holds another 50 Class A shares.
The Indian-born Jain, who turns 73 on Sept. 15, has been a critical figure in Berkshire’s insurance operations for nearly 40 years. He is probably the Berkshire employee closest to CEO Warren Buffett, who has regularly praised Jain in his annual shareholder letters and at the Berkshire annual meeting.
“If you meet Ajit at the annual meeting, bow deeply,” Buffett wrote in his 2012 annual shareholder letter.
Jain is a brilliant insurance underwriter who has been responsible for billions of dollars of profits for Berkshire by accurately assessing the risk of big-ticket events including catastrophes like hurricanes. Jain has benefited from Berkshire’s deep pockets and Buffett’s willingness to take big insurance risks if the premiums are sufficient.
Jain was responsible for what could have been a profit of over $1 billion last year for Berkshire when the company took on about $15 billion of potential exposure for Florida hurricanes and profited from a light storm season.
Jain was promoted to a Berkshire vice chairman and head of overall insurance operations in 2018. He joined the Berkshire board at the time.
He is well paid, earning $20 million last year in total compensation and $19 million in each of the prior two years. It’s believed that Jain purchased his entire Berkshire stake with his own money since the company does not give out stock compensation to any employees—reflecting Buffett’s philosophy that employees should be paid in cash and that every Berkshire share is precious.
Barron’s wrote recently that the stock looked pricey when the A shares topped $720,000. They have declined since then and were off 1.2% Wednesday to $680,040, and are down another 2.6% in after-hours trading.
The sale could be viewed negatively by investors given its size and the timing with Berkshire stock having recently passed $1 trillion in market value and near a record high. Jain sold the stock at almost exactly a $1 trillion market value.
That could be good timing.
Write to Andrew Bary at andrew.bary@barrons.com
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jain Form 4 filing

https://app.quotemedia.com/data/downloadFiling?web...

the footnotes to jains Form 4,



Explanation of Responses:
1. Each share of Class A Common Stock is convertible at any time at the option of the holder into 1,500 shares of Class B Common Stock.
2. On September 9th, 2024, the Reporting Person sold 200 shares of Class A Common stock at an average price of 695,417.65 per share. Upon request by Berkshire Hathaway Inc., any security holder thereof, or the staff of the Securities and Exchange Commission, the Reporting Person can provide full information regarding the specific pricing of individual sales.
3. These amounts reflect changes from previous filings, where in ordinary estate planning, shares of Class A Common Stock directly or indirectly beneficially owned by the Reporting Person were reallocated as between trusts established by the Reporting Person (and their spouse) and direct ownership of the Reporting Person.
4. Other than the 200 shares sold by the Reporting Person on September 9th, 2024 as reflected herein, no shares of Class A Common Stock were acquired or disposed of from the perspective of shares directly and indirectly beneficially owned by the Reporting Person.
5. Family trusts established by the Reporting Person's spouse for the benefit of the Reporting Person's descendants own 17 shares of Class A Common Stock.
6. Family trusts established by the Reporting Person for the benefit of the Reporting Person's descendants own 38 shares of Class A Common Stock.
7. The non-profit corporation Jain Foundation, Inc. owns 50 shares of Class A Common Stock.

Jain has a charity and he has done this before as I recall?

Jain has a charity and he has done this before as I recall?

That is correct but these sold shares are not foundation shares - these are his directly owned personal shares. Ajit is a decisive capital allocator! I'm sure he had his reasons.

I wonder why he didn't convert the 200 A shares to B shares before selling. I don't think these went to the company and I know Warren would prefer A-to-B conversions before sending them into the wild.

I don't think these went to the company

Can you tell who the purchaser was based on the filing?

I don't think these went to the company

Can you tell who the purchaser was based on the filing?


No, but you can tell the 200 shares were sold in multiple transactions and not in one block trade to Berkshire. Plus I sort of doubt Berkshire was a buyer at $700k, even for incoming A share blocks, and I don't think Berkshire likes the optics of buying shares directly from a director. It is possible there are other issues with a US company repurchasing shares directly from an insider. Fairfax recently did it with Prem but that is a Canadian company.

" Can you tell who the purchaser was based on the filing?"

No, unless the buyer discloses who they are. In brks world 140 million is almost an odd lot but Buffett may have decided not to pay that price based on principal. Brilliant trade, hopefully his family enjoys the proceeds in great health!

Nice timing.

Perhaps Mr. Jain should take over Ted and Todd's portfolio.

Agree with all of that. But Wow, 50% sell is quite Surprising. I suppose his age, health status, uncertain tax changes/political environment & BRK’s recent strong market price were factors. Ajit could also be making another huge contribution to an institution or a cause that is dear to his heart. Maybe he has also reflected and “won the game” of asset building in life and wants to his ensure future Jain generations and their philanthropic interests will be quite comfortable. I would imagine he had a discussion out of respect with Warren & Greg. I would love to hear his response as to his reasoning as he is refreshingly straightforward in his answers. Very happy for him (and all of us) that his BRK purchases and loyalty have worked out so well.

The press has it wrong. Ajit sold 44.5% of his Berkshire stock. He owned 449 A equivalent shares (based on the latest proxy) prior to the sale. Even after this sale, he owns more stock (249 shares) than Greg (229 shares).

I am sure Ajit had his reasons for selling.

Ajit is in the grand master category for evaluating probability events. Maybe the variables are signaling him to take half his gains off the table here in 2024.

Sure wish I had access to the internal summaries he and his immediate staff reports are writing here in 3rd QTR 2024.

Uwharrie

Ajit is truly a master of probabilities.
In the absence of additional information
I am adding the news of his sales to Jim's advise (and others) to conclude that : pulling forward any sales
I need to be made in the next few years, is a reasonable thing to continue to do...
I am new to the spending down phase of life and with some shares purchased around $5k in '88 I am finding
the math on this truly"gobsmacking"

some shares purchased around $5k in '88

Man, nicely done.
Not just buying them...that, anybody could have done.
But not ever selling them, wow!

Jim

Not just buying them...that, anybody could have done.
But not ever selling them, wow!

Like Charlie once said, "Just hold the damn stock."

Of course, sitting on your hands is easier said than done.

Like Charlie once said, "Just hold the damn stock."
Of course, sitting on your hands is easier said than done.

Indeed. Hi, my name is Jim, I am a compulsive trader. But I have spent the last couple of decades honing the art of trading in a mostly harmless way, so it mostly works out OK.
For example, despite the vast majority of my equity related positions being in Berkshire, my account is up so far this month, so for once my overwrought approach is working. The stock is down 5.3%.

Jim

I turns out I am good at doing nothing !

"I was born on 3rd base and I'm just trying to get home" : )

Tom

So how did it come to pass that you bought Berkshire shares at around $5K in 1988?

I used about half my available cash to buy Berkshire, October 20-something 1987.

My soon-to-be-father-in-law, a stockbroker, seemed to think this was quite rash, and that there were good reasons for the recent general decline in prices, something about the Fed, or taxes, or whatever.

But I had been watching Buffet since I was a kid, and it seemed like a 30% decline (for no apparent reason) might be a buying opportunity.

And what happened to the other half of my cash? A nice honeymoon….Berkshire was around $100K when the marriage ended.

I helped oversee the sale of my Dad's business
and once it sold, a British stockbroker friend, gave me several older Annual Reports...

Buffett's voice which came through strongly in those reports - down to earth, straight shooter etc.
sounded to me alot like listening to my Dad and Grandfather... and it still does !
It was really that simple
Tom

insiders buy for 1 reason
..and sometimes there is 140m reasons insiders sell...

dare i say, that's near escape-the-cult pile of cash !

the math on this truly"gobsmacking"

Just watched “Becoming Warren Buffett” on HBO or Showtime or wherever it was. Not terribly insightful (I think most everyone on this board knows everything about his life anyway) but the relevant point was “compounding”. It’s magic, all it requires is “time”, which we all have some of. Well, maybe not anymore, but once-upon-a-er-time we did.

I’ve had a bunch since the mid 90’s and other tranches acquired along the way. Some of it I’m lucky enough to have in an IRA and a Roth IRA, but some is right out in front of the tax man, who I can see rubbing his hands together in anticipation.

Like so many here, I came across the Warren Buffett and began reading his reports and glommed onto his no-nonsense tone and what felt like obvious logic. I was in my mid-20s when Roger Lowenstein's biography hit the library and I devoured it. My father had passed, leaving me a small inheritance that I was interested in making much bigger. B shares had been issued a year or two before, so I could nibble my way in. I look back now and shudder (not really, the amount is tiny compared to the return) that I paid about $50/commission as I took baby steps rather than just one solid chunk. But I was young and no one in my family ever invested in the stock market. My dad was older than Warren and lived through the depression in a very desperate way and it never left him.

I sold the house he left me. I took the proceeds and dumped most of them into more shares. I moved to a cheaper area and eventually found a cheap house to put a few bucks down on. I was self-employed so I loaded up my self-employed 401K to the max, adding more shares. I won't say I lived frugally, though some might say that hiring local kids to help move rather than a moving company was a frugal move. My gf and I rarely went out to eat and we saved.

TIME made me look like a knowledgable investor. I held onto a core holding in BRK, in non-IRA accounts, in Roth IRA, in the self-employed 401K which I rolled into a trad IRA to lower the paperwork once I retired (disability actually but that's another sob story, no need here).

I'm nowhere near as well-off as many of you, but I'm doing just fine. Better than I ever expected, really. I mean, sure I played with compounding and imagined what I'd have if I'd compounded at 22%, but at 12% or so, that's still better than most.

I may be mistaken but it sure looks like if I die first -- and that is the likelihood -- then my wife will get a stepped up cost basis that will save plenty in capital gains. And if not, well, there's still plenty to go around.

SD

I think the answer is simple.

I just got a targeted email ad this morning. It says “the middle class doesn’t have to worry about Kamala Harris’ tax plan. She proposes taxing unrealized capital gains over $100 million! Do YOU have unrealized gains over $100 million?”.

Now suppose Ajit got this e-mail. Or Warren Buffett.

I’m pretty sure that explains their behavior. Cost basis matters more than ever.

I just got a targeted email ad this morning. It says “the middle class doesn’t have to worry about Kamala Harris’ tax plan. She proposes taxing unrealized capital gains over $100 million! Do YOU have unrealized gains over $100 million?”.

Now go back and look at how the Federal Income Tax was sold. "Only 2% of people will pay it and those are only multi-millionaires."

<<Now go back and look at how the Federal Income Tax was sold. "Only 2% of people will pay it and those are only multi-millionaires.<<

Now go back to looking at Warren Buffett's holdings . And Ajit Jain's holdings. See if you get this basic point.

Now go back and look at how the Federal Income Tax was sold. "Only 2% of people will pay it and those are only multi-millionaires.

or AMT, when introduced was supposed to hit a tiny number of people in the country. Now it hits practically every tax payer making over $100K.

“the middle class doesn’t have to worry about Kamala Harris’ tax plan. She proposes taxing unrealized capital gains over $100 million! Do YOU have unrealized gains over $100 million?”.

Now suppose Ajit got this e-mail. Or Warren Buffett.

I’m pretty sure that explains their behavior. Cost basis matters more than ever.


Yes, I suppose that would do it, but only if they really wanted to sell and it was only the tax deferral that was keeping them from doing it. Then they might think, "I have a 50:50 chance of Harris being elected and making me pay that tax anyways." Well, actually, no, scratch that, "I have a 1 in 10(?) chance of getting a Democratic president AND a Democrat Congress and a Democratic Senate, and of them deciding to go ahead with this plan despite the problems with feasibility, so I might have to pay that tax anyways." Not quite as convincing.

or AMT, when introduced was supposed to hit a tiny number of people in the country. Now it hits practically every tax payer making over $100K.

I don't believe that's anywhere near true. In the TCJA regime a very small number of taxpayers are affected in the $100K+ range. When TCJA expires in 2026, about 20% of $100-$200K taxpayers and 70% of $500K-$1M taxpayers are expected to be affected, which looks inline with pre-TCJA rates (source: https://www.taxpolicycenter.org/briefing-book/who-...). There are about as as many people in the $100-200K range as in all the higher ones combined (source: other docs on that site) => worst-case maybe 40-45% of $100K+ taxpayers will be affected post-TCJA. Most of us would probably agree that 45% is not "practically every".

Personally I've been earning $100K+ since the turn of the millennium, now nearly twice that, and have never once been hit by AMT. My federal taxes have run right around 19-24% of income the whole time.

It is a small price to pay for living in a (somewhat) functioning civilization with a government that does useful things, not just caters to billionaires and pretends to cater to the rest of the "upper class", who are largely irrelevant unless they can buy a circuit court judge, or at least a Congressional representative.

the secret is out. mechanical investing has nothing on these guys.
BH insiders have all sold when a Dem might get elected, and bought back in when a GOP might get elected.

let's celebrate with some baked fido.

worst-case maybe 40-45% of $100K+ taxpayers will be affected post-TCJA

Wether one gets hits with AMT or not depends on the sources of income in addition to the total taxable income of an individual. So congrats to you for not getting hit with AMT.

But here is the history of AMT from the Tax Foundation:

The AMT was enacted in 1969 to keep wealthy taxpayers from using what was viewed as too many tax preferences. In 1969, U.S. Treasury Secretary Joseph Barr testified that in 1966, 155 high-income people paid zero income tax. Instead of eliminating the tax preferences that enabled these taxpayers to reduce their taxable income, Congress created a minimum tax.

Regardless of exactly how many tax payers are hit with AMT today, any reasonable person would conclude that it affects orders of magnitude more people (numbering in millions) than originally intended (155 people). Everyone is aware of this but the federal govt refuses to fix it because they like the revenue from it.

Regardless of exactly how many tax payers are hit with AMT today, any reasonable person would conclude that it affects orders of magnitude more people (numbering in millions) than originally intended (155 people). Everyone is aware of this but the federal govt refuses to fix it because they like the revenue from it.

That is not quite correct. The TCJA almost completely eliminated the AMT by raising the exemption and adding in deductions. Under current law, only about 0.1% of tax filers pay the AMT.

Now it hits practically every tax payer making over $100K.

Not even close to true. Many of my colleagues the last 20 years have been making that or double it in salary as joint married professionals and I've never heard of one getting sucked into AMT crap.

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