Warren Buffett turns 94 years old this week – and for some of us, it feels like a sort of unofficial holiday. I’ve been tracking his legendary investment plays and advice for over 40 years, and I make it a point to go to Nebraska every year for his annual shareholder meeting. So, naturally, his birthday has me thinking about his recent moves and what he might have up his sleeve for the year ahead.

Wait, 40 years of tracking Warren Buffett?

It’s been longer than that, actually. I started keeping tabs on Berkshire Hathaway in 1980 after reading about Warren Buffett in a book called The Money Masters by John Train. I remember seeing the stocks he was investing in – American Express, the Washington Post Company, and Capital Cities Broadcasting. I knew enough to recognize that these were good, under-the-radar companies.

And after about five years of watching Berkshire Hathaway’s stock, I decided to buy a share.

Back then, Berkshire wasn’t closely followed or heavily traded – and it definitely didn’t have the $1 trillion valuation it has today. I’d check the stock pages of The Wall Street Journal religiously, but often it just wouldn’t appear, since no shares were bought or sold the day before. When I purchased my single share, I was 10% of that day’s trading volume.

Berkshire wasn’t cheap, even then. When I started tracking the shares, they were going for about $500, but five years later when I finally made my move, that one stock cost me $2,120. It seemed like a lot – and a few folks (including my mother) told me it seemed overpriced – but, well, it’s worked out pretty nicely for me. Class A shares like mine currently go for about $680,000.

The price of Berkshire Hathaway’s Class A shares, over time. Source: Koyfin.

So what’s Buffett been doing lately?

Selling Apple, for a start. At the beginning of this year, Buffett’s Berkshire Hathaway was very heavily invested in Apple. The conglomerate began buying shares in the iPhone maker back in 2016 and it mostly added to its stake until it represented roughly half of its $360 billion stock portfolio. Now, that’s a lot – a heavier proportion than Buffett has ever had in a single stock.

So Berkshire’s been selling off Apple piece by piece, offloading about 13% of the stake in the first quarter, and selling a stunning 50% of its remaining stake in the second quarter.

It’s not that Berkshire has lost faith in Apple or its CEO, Tim Cook. In fact, Buffett made sure Cook was at the annual shareholders meeting in Omaha as a special guest when he discussed the stock sale, and went to great pains to reassure investors that he wasn’t bailing out on the company. And, look, I’m a regular at these meetings, and I can tell you: Tim Cook is not. This was his first time attending.

But, really, why sell Apple?

On stage at the meeting, Buffett explained his reasons for selling Apple – citing the high US debt load, the potential for an increase in the US corporate tax rate, and the desire to seek out other opportunities. But in the back of my mind, I’m thinking, there’s another reason.

After all, Buffett has described Apple not just as Berkshire’s best stock, but as its best business. And Berkshire certainly put its money where its mouth is: it was the sixth-biggest holder of Apple stock, behind giants like Fidelity, BlackRock, and, well, Tim Cook.

And, frankly, that was likely a major part of the issue. The firm’s massive stake made Apple a sizable percentage of Berkshire’s portfolio – a percentage that got bigger and bigger with the shares’ gains and some subsequent stock buys. That put the portfolio’s total returns at a greater risk if something were to go wrong with Apple. And, let’s be clear, things can always go wrong – especially in tech, where today’s leading company can be obsolete in just a few years. And, so, Buffett began selling.

In some ways, it could hardly have come as a surprise. Buffett’s a patient, rational, disciplined investor. Before Apple, I’d never seen a single stock represent more than 20% of Berkshire’s stock portfolio – let alone 50% of it. However, at the end of the second quarter, Apple still represented 30% of Berkshire’s portfolio. The next biggest allocation was Bank of America at 15%, followed by American Express, at 13%.

According to its latest regulatory filing, by the end of the second quarter, Berkshire owned an equal number of shares – 400 million – in both Apple and Coca-Cola. And there’s something about those nice round numbers and the affinity that Buffett has for those two companies. It suggests to me that Berkshire is likely done selling Apple.

Now, a few folks will say that Buffett mis-timed his hefty Apple sell-off. The company’s stock is having a solid year, after all, gaining over 20%. But, look at it this way: Buffett bought his entire Apple stake for about $36 billion, and sold a little over one-half of it for about $90 billion – about five times its initial value – so, well, it’s worked out pretty nicely for him.

So what’s the big takeaway here?

I’d say there are two.

First, it’s never a bad idea to take a page from the book of Buffett. And in this case, that may mean having a look at the allocations in your own portfolio to see if a particularly heavy weighting is tipping you uncomfortably far toward risk. Unexpected things can happen (and do), and creating a balance across assets can help you stay on your feet when things start to shake.

Second, keep an eye on what Buffett does next. After all that selling, Berkshire is now sitting on an overwhelmingly big stack of cash, and that may indicate that Buffett views the stock market as being fully valued. Since the economic cycle has not been repealed, whenever the next recession occurs, stocks will very likely decline sharply in value. Warren Buffett, as he has done in the past, would then be able to jump in and invest at very attractive valuations.

When he does, you might consider buying alongside Buffett (as many do), or you could opt to invest in a Berkshire B-Class share (or an A-Class share, if you can swing it). Or, as Buffett would say, you could consider buying a share of every major company in the US at a low cost, with an S&P 500 tracker ETF.

–David Kass is a professor of finance at the University of Maryland.