Warren Buffett's Massive Sale of Bank of America Shares

Warren Buffett's Berkshire Hathaway Sells Billions in Bank of America Shares

Berkshire Hathaway, led by 94-year-old Warren Buffett, has been consistently selling its shares in Bank of America for several months. The selling spree, which started in mid-July, has not been officially explained, but it could indicate that Buffett, often referred to as the 'Oracle of Omaha', predicts economic difficulties on the horizon.

Berkshire Hathaway's Sales Proceeds Exceed $10 Billion

According to the most recent data from Bloomberg, the total proceeds from Berkshire's sale of Bank of America shares have surpassed an impressive $10 billion. The company began reducing its substantial investment in the bank in mid-July, which has since put downward pressure on the bank's shares. In the past three trading days alone, Berkshire has sold shares worth $383 million.

Berkshire Hathaway's First Sale of Bank of America Shares Since Pandemic

This is the first instance of Berkshire selling Bank of America shares since just before the pandemic. Despite the extensive selling, Berkshire's position in Bank of America remains large, with a total value of $31.35 billion, making it the bank's largest shareholder.

Buffett's Stake in Bank of America Nears Regulatory Threshold

Buffett's stake in Bank of America has now decreased to 10.1%. A little more selling would bring it below the 10% regulatory threshold. Once this threshold is reached, Berkshire will no longer be obligated to report additional sales to the SEC.

Possible Reasons for Buffett's Bank of America Share Dump

Several theories have been proposed to explain Buffett's decision to sell Bank of America shares. These include an overvalued market, the risk of recession, a downturn in consumer spending, and the potential for a US regulatory investigation into anti-money laundering related to fentanyl cash laundering to extend to major US banks. It's also worth noting that Buffett's cash reserves have reached record levels.

Buffett Also Sells Half of His Apple Shares

In addition to selling Bank of America shares, Buffett has also sold half of his Apple shares.

Bottom Line

Unlike in October 2008, when Buffett encouraged investors to "Buy American," he is now selling American assets at an alarming rate. This raises questions about what the future holds for the American economy. What are your thoughts on this issue? Feel free to share this article with your friends and discuss it. Don't forget to sign up for the Daily Briefing, which is available every day at 6pm.