Berkshire slashes Bank of America stake

Warren Buffett's Berkshire Hathaway has reduced its stake in Bank of America (BofA) to below 10%, selling over 9.5 million shares between mid-July and October. This move means Berkshire is no longer required to disclose future transactions involving BofA in real time. Despite the sales, BofA’s stock has risen slightly, supported by the bank’s own repurchasing activities.

Buffett has a long history with BofA, having initially invested $5 billion in 2011 to stabilize the bank after the subprime mortgage crisis. Over the years, Berkshire added significantly to its holdings. However, Buffett has become more cautious about the banking sector, reducing his investments in major banks like JPMorgan, Wells Fargo, and Goldman Sachs due to concerns over the stability of deposits and changing market dynamics, particularly following the financial crises of 2008 and 2023.

In light of Buffett’s cautious approach toward the banking industry, investors may consider diversifying their portfolios beyond traditional equities. Precious metals like gold and silver can offer stability, especially during periods of economic uncertainty and financial sector volatility. Gold and silver tend to hold their value when confidence in the banking system wanes, making them a valuable hedge against market disruptions and a prudent addition to a diversified investment strategy.

To Read More: https://www.cnbc.com/2024/10/10/berkshire-slashes-bank-of-america-stake-to-under-10percent.html