Warren Buffett has been selling a large amount of Bank of America stock. Berkshire Hathaway, Buffett’s company, has sold over $10 billion worth of the bank’s shares since mid-July. In the latest round of sales, Berkshire made $383 million over three trading days.
The company sold fewer shares than in previous rounds. Buffett’s selling typically slows down when Bank of America’s stock price approaches $39. On Monday, the shares closed at $39.96.
Berkshire Hathaway still owns a 10.1% stake in Bank of America, which is currently worth about $31.4 billion. Buffett’s decision to sell Bank of America stock is part of his strategy to adjust Berkshire’s portfolio.
He is making changes based on the current market and his investment priorities. Buffett has also been selling shares of Apple, which is Berkshire’s largest holding.
Buffett adjusts Berkshire’s stock portfolio
Between the fourth quarter of 2023 and the second quarter of this year, he sold over half of Berkshire’s position in Apple. Buffett’s recent selling seems motivated by worries about taxes and stock valuations. He thinks corporate tax rates could increase after 2025 when current tax laws expire.
Instead of holding stocks, Buffett has been putting Berkshire’s money into U.S. Treasury bills. At the end of the second quarter, Berkshire owned $238.7 billion in Treasury bills and had $38.2 billion in cash. Treasury bills are short-term bonds that mature within a year.
They are very safe investments and are less affected by changes in interest rates. Short-term bonds have yielded better yields in the last two years than long-term ones. This is because investors expect interest rates to be lower in the future.
Buffett likes Treasury bills for their high yields, safety, and ease of selling. For him, they are the best use of Berkshire’s money right now.
