Quick Take: Buffett Sells China

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The love affair between Warren Buffett's Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) and PetroChina (NYSE: PTR) appears to have run its course.

Berkshire has reported selling more than 70% of its stake in the Chinese energy behemoth, and according to The Wall Street Journal, it has likely liquidated its entire position. Some attribute the sales to the Darfur controversy. But I believe that in and of itself, that issue wasn't enough to force Warren's hand. Divestment was put to a vote at the annual meeting and resoundingly defeated.

Others attribute the sales to frothiness in the Chinese market. PetroChina shares have returned nearly 1,000% over the past five years and 50% year to date. If you look at the long-term chart, shares have recently gone parabolic. Remarkably, PetroChina is actually the year-to-date laggard compared to Shanghai Petrochemical (NYSE: SNP), Sinopec (NYSE: SHI), and offshore explorer CNOOC (NYSE: CEO).

Ultimately, the situation appears to be a fortuitous dovetailing. Berkshire does right by activists and its shareholders by cashing in today. Unless you use bubble-vision valuation metrics like five-year forward earnings -- ahem, Mark Mobius -- PetroChina looks pretty fully valued. It's a wonderful time to take a multibagger off the table.