After months of massive selling of Bank of America stocks, the cash reserves of Berkshire Hathaway, led by the "stock god" Buffett, have become even stronger.
According to a new document submitted to the SEC, Berkshire Hathaway reduced its holdings of Bank of America shares for three consecutive trading days on October 3, 4, and 7, 2024, totaling 9.571 million shares and cashing out approximately $383 million. Bank of America is currently Berkshire Hathaway's third largest holding.
According to statistics, this is the 14th round of selling Bank of America stock disclosed by the company since mid July, and Buffett has accumulated over $10 billion in cash, indicating a potential liquidation.
After the latest round of divestment, Berkshire Hathaway still holds about 10.1% of Bank of America's shares, worth approximately $31.4 billion, firmly holding the position of the largest shareholder, but only one step away from the "regulatory tipping point".
According to relevant regulations, if the shareholding ratio exceeds 10%, the transaction must be disclosed within 2 days; If the shareholding ratio does not exceed 10%, there is no need to disclose the trading situation as soon as possible. Usually, it may take several weeks to disclose in each quarterly report. In fact, Buffett himself prefers to buy and sell stocks without quick public disclosure.
According to analysis, without considering the impact of taxes, Buffett's total proceeds from selling Bank of America shares since mid July, plus dividends earned since 2011, have exceeded the $14.6 billion he spent on purchasing Bank of America shares.
For many years, Buffett has been increasing his holdings in Bank of America and praising the bank's leadership, but so far, he has not publicly explained his recent decision to reduce his holdings.
At last month's Barclays Global Financial Services Conference, Brian Moynihan, CEO of Bank of America, told the audience that he couldn't directly call Buffett and ask him what he was doing, "because frankly, we can't ask and we won't ask.
However, some analysts believe that the reasons include the overvaluation of Bank of America and the Fed's interest rate cuts after a four-and-a-half-year hiatus. It is understood that Bank of America is very sensitive to changes in interest rate cycles, and may even be more sensitive than other banking peers.
As for whether Buffett's consecutive selling behavior really means clearing his position in Bank of America, it is still unknown. However, according to his habit, when he starts selling a stock, he will eventually clear his position in that stock. In recent years, Berkshire Hathaway has liquidated its holdings in several banks, including Bank of America, Wells Fargo, and Bank of New York Mellon.
Ashe Shah, the investment director and senior portfolio manager of Summit Global Investments, commented: "In a word, Buffett seems to think that the best investments at present are cash and treasury bond bonds."