Warren Buffett's company Berkshire Hathaway has surprised the market this year by selling big chunks of two of its largest holdings. First, Berkshire sold more than 60% of its shares in the consumer tech giant Apple, which had constituted more than 40% of Berkshire's equities portfolio. Then, in the second and third quarter, Berkshire trimmed its position in Bank of America by more than 28% through numerous small incremental transactions.

The moves surprised investors who have been enjoying the bull market. It's hard for anyone to get inside the mind of one of the greatest investors of all time. But another billionaire investor with superior market returns might have a better idea. Let's see what David Einhorn thinks.

Is Buffett timing the market?

Einhorn has managed money since he raised $900,000 from family and friends at age 27. Since his fund Greenlight Capital launched in 1996, it has generated average annual returns of 13.1%, compared to 9.5% for the broader benchmark S&P 500 index.

In his Q3 letter to shareholders, Einhorn specifically opined on some of Buffett and Berkshire's sales this year, and on Berkshire's decision to buy limited amounts of stocks and pile into cash and short-term Treasury bills. Einhorn noted that while Buffett has always positioned himself as a long-term investor, he's also been extraordinarily good at timing the market:

When the market got too frothy in the late 1960s, he closed his fund. Towards the market bottom in the early 1970s, he re-emerged as a stock picker and then prior to the 1987 crash, he sold everything except a couple of illiquid holdings. Later, he sidestepped the various crises in corporate credit and was well-positioned to capitalize on the 2008 global financial crisis. One could argue that sitting out bear markets has been the underappreciated reason for his outstanding long-term returns.

According to Einhorn, Buffett is not necessarily expecting the market to nose-dive tomorrow. But he could be of the long-term view that the market, which has been hitting all-time highs this year, is overheated and that equities are less attractive right now. The market is not necessarily in a bubble, but it has a high price-to-earnings ratio despite earnings reaching a high in the cycle, Einhorn wrote.

Einhorn isn't the only one concerned about the market. A team of strategists at Goldman Sachs recently released a report calling for 3% annualized nominal total returns for the S&P 500 over the next decade. The strategists believe that because the market has been driven by a small number of companies in the "Magnificent Seven," the bull run will be difficult to extend because companies will not be able to keep up high revenue growth and profit margins.