The company under Warren Buffett has once again reduced its holdings of Bank of America stocks

Recently, the move by Warren Buffett's company Berkshire Hathaway to once again reduce its holdings of Bank of America stocks has drawn market attention.

According to regulatory filings disclosed, Berkshire Hathaway sold Bank of America stocks worth more than $800 million, and its shareholding ratio has dropped to 11.4%. The 94-year-old Buffett began investing in the bank in 2011 by spending $5 billion to acquire preferred stocks and warrants of Bank of America. Since then, Berkshire Hathaway has eventually become the largest shareholder of Bank of America.

However, since July this year, Berkshire Hathaway has sold Bank of America stocks worth billions of dollars in multiple rounds of reductions. For example, from August 23 to 27, the company sold about $981.9 million worth of Bank of America stocks; from August 28 to 30, it sold about 21 million shares again, cashing out $848 million.

The market is full of speculations about this reduction behavior. Some views hold that Buffett's selling of Bank of America stocks may be due to the bank's overvaluation. At the same time, Buffett may also be preparing in advance for the shift in the Federal Reserve's monetary policy. The market generally expects that the Federal Reserve may start a rate cut cycle in September 2024, which will bring downward pressure on the yield of interest-bearing assets of banks and may weaken the profitability of the US banking industry. But some ***ysts point out that looking at the historical earnings trend of bank stocks, the combination of high inflation and high interest rates is beneficial for bank stocks. However, Buffett has chosen to sell Bank of America shares at this time, showing that he does not recognize this "inflation narrative".

As one of the most respected investors in the world, Warren Buffett's investment decisions often have a guiding significance. This continuous reduction of holdings of Bank of America stocks undoubtedly sends a complex signal to the market and also triggers in-depth thinking from all sectors on the future trend of Bank of America and even the entire financial market. The subsequent investment trends of Berkshire Hathaway and the stock price performance of Bank of America will continue to be closely watched by the market.