Warren Buffett’s recent move to cut Berkshire Hathaway’s stake in Bank of America (BofA) shows a major change in the company’s investment strategy. In just three days, Berkshire Hathaway sold 19.2 million BofA shares, earning about $779 million. This sale is part of a larger trend, as Berkshire has been selling BofA shares for 12 days straight, totaling over $3.8 billion. Even with this big reduction, Berkshire Hathaway is still the largest shareholder in BofA, with around 942.4 million shares worth $37.2 billion at recent prices.
These sales have moved BofA from being Berkshire’s second-largest investment to third place, now behind Apple and American Express. This shift reflects a change in Berkshire’s investment priorities, possibly due to changing market conditions and strategic adjustments.
Although BofA’s stock has fallen by 5.2% this week due to recession worries affecting the financial sector, the bank has done well this year with a 17% increase, outpacing the S&P 500. Buffett’s initial investment in BofA during the 2011 financial crisis was a strong vote of confidence in the bank. However, this recent sell-off shows a shift in Berkshire Hathaway’s investment focus, indicating a change in response to current market trends and priorities.
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