Buffett 'clearance style' selling this stock
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发表于 2024-8-28 15:52:14
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Warren Buffett, the 'Stock God', is selling Bank of America stocks again, this time in a 'clearance style'!
Between August 23 and August 27, Berkshire Hathaway, owned by Warren Buffett, sold approximately $981.9 million worth of Bank of America stock. And between the 15th and 19th of this month, Buffett just sold about $550 million worth of Bank of America stock.
Buffett sells $980 million worth of Bank of America stock again
According to disclosure documents from the US Securities and Exchange Commission (SEC), Berkshire Hathaway, owned by Warren Buffett, sold approximately 24.7 million shares of Bank of America common stock between August 23 and August 27 for a transaction amount of approximately $981.9 million.
In 2011, Berkshire Hathaway began long-term investments in Bank of America and became its largest shareholder. For a long time, Buffett has been casting a vote of confidence in the leadership abilities of Brian Moynihan, the CEO of Bank of America.
But now, this trust seems to be on the verge of collapse. This 93 year old legendary investor had already started reducing his holdings in Bank of America, his second largest holding, as early as July this year, cashing out $3.8 billion for 12 consecutive trading days.
After a six-month hiatus, Buffett sold approximately 14 million shares of Bank of America stock worth around $550 million between the 15th and 19th of this month. As of now, Berkshire Hathaway has sold approximately 120 million shares of Bank of America stock this year, and still holds approximately 903 million shares of Bank of America stock. Calculated at the latest price of $39.67 per share, the value of its holdings is around $35.8 billion.
Reporters have found that in recent years, Berkshire Hathaway has gradually liquidated its holdings in several banks, including Bank of America, Wells Fargo, and Bank of New York Mellon.
Why did Buffett reduce his holdings of Bank of America?
Why does Berkshire frequently sell Bank of America stocks?
So far, Buffett himself has remained silent on his reasons and intentions for reducing his holdings in Bank of America.
However, there have been speculations from the outside world. The reasons for market speculation include the overvaluation of Bank of America and the possibility that Buffett may be preparing for a shift in the Federal Reserve's monetary policy.
After the release of inflation and retail sales data in July, the market's expectations for the Federal Reserve's interest rate cuts gradually returned to rationality. With the recent release of relevant US data, market expectations for the risk of a US economic recession have rapidly fallen, "said Kristina Hooper, Chief Global Market Strategist at Jingshun.
Entering August, more economic data began to support the US interest rate cut, and the Federal Reserve continued to send signals to the outside world that it was about to cut interest rates. At last week's Jackson Hole Global Central Bank Annual Meeting, Federal Reserve Chairman Powell issued the strongest signal of interest rate cuts to date.
Powell's "dovish voice" echoed loudly, and other Federal Reserve officials also responded, stating that a rate cut is imminent. Philadelphia Fed President Huck, Chicago Fed President Goolsby, Atlanta Fed President Bostic, and others expressed their views on the September rate cut before and after Powell's speech. Earlier, Minneapolis Fed President Kashkari, San Francisco Fed President Daly, and others also expressed their views on the control of US inflation and the upcoming interest rate cuts.
In terms of stock price, Bank of America has risen nearly 20% this year and reached a new high in over two years in mid month. Its total market value has now reached $307.8 billion.
[align center] The long-standing bond between the "Stock God" and Bank of America
In fact, Buffett has also made mistakes on Bank of America.
Berkshire Hathaway's first purchase of Bank of America stock in history can be traced back to the second quarter of 2007. At that time, Buffett bought 8.7 million shares of Bank of America stock at a price close to $50 per share, and then further increased his holdings. But with the outbreak of the financial crisis, the market began to deteriorate, and Buffett eventually cleared all of Bank of America's positions in the fourth quarter of 2010.
In 2011, Buffett regrouped and invested $5 billion in Bank of America, whose stock price was around $6 per share at the time.
In this transaction, Buffett received preferred stock with an annual interest rate of 6%, which can be converted into 700 million ordinary shares at a price of $7.14 per share for a term of 10 years. In 2017, Buffett exercised a stock swap, and Bank of America's stock price had risen to $24 per share. This move created objective book profits for Berkshire Hathaway and became a major highlight for Buffett personally.
After multiple portfolio adjustments, Berkshire gradually became the largest shareholder of Bank of America, and Bank of America was also the company's second largest holding after Apple.
Until last year, Buffett began to adjust his bets and investments in the financial industry, but he still maintained that "persistence" towards Bank of America. He once publicly stated that Bank of America is worth keeping, 'I really like Moynihan, I just don't want to sell it'.
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Disclaimer: The views expressed in this article are those of the author only, this article does not represent the position of CandyLake.com, and does not constitute advice, please treat with caution.
Disclaimer: The views expressed in this article are those of the author only, this article does not represent the position of CandyLake.com, and does not constitute advice, please treat with caution.
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