Warren Buffett's Bank of America stock holdings are a significant aspect of his investment strategy. He invested $5 billion in Bank of America in 2011.
Warren Buffett's investment in Bank of America was a strategic move to help the bank recover from the financial crisis. He saw an opportunity to invest in a well-established institution with a strong brand.
Buffett's investment in Bank of America was made through Berkshire Hathaway, his multinational conglomerate holding company. Berkshire Hathaway owns approximately 9.7% of Bank of America's outstanding shares.
Buffett's investment in Bank of America has been a long-term play, with the goal of benefiting from the bank's future growth and profitability.
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Warren Buffett's Bank of America Investments
Warren Buffett's investment in Bank of America was a $5 billion bet made 13 years ago.
Buffett made this investment in August 2011, when Bank of America was coming off a quarter where it lost $8.8 billion due to the subprime mortgage crisis.
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The bank's stock price was down about 50% on the year, making it a low-risk investment for Buffett.
He reportedly got the idea to invest in BofA while soaking in the bathtub, and then tried to reach CEO Brian Moynihan to finalize the deal.
Buffett's investment in BofA was not his first big bet on a troubled financial institution – he has a pattern of buying bank stocks when they're low and taking big profits from the investments.
In fact, Buffett has been doing this for over 60 years, with this investment being just one example of his successful strategy.
Here are some key facts about Buffett's Bank of America investment:
- Buffett's initial investment in BofA was $5 billion.
- He made this investment in August 2011, when BofA was struggling due to the subprime mortgage crisis.
- The bank's stock price was down about 50% on the year when Buffett made the investment.
- Buffett's investment in BofA was not his first big bet on a troubled financial institution – he has a pattern of buying bank stocks when they're low and taking big profits from the investments.
As of 2019, Bank of America had over $1.8 trillion in assets, with the majority of those holdings being domestic.
Buffett's latest stake in BofA is slightly over 11 percent, as tracked by Thomson One.
The bank's CEO, Brian Moynihan, credits Buffett with stabilizing BofA in its time of need.
Buffett has not always executed his exit flawlessly, but his investment in BofA has been a successful one so far.
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Berkshire Hathaway's Actions
Berkshire Hathaway began trimming its stake in Bank of America in July.
Berkshire dumped the bank's stock in mid-July and shed another 5.8 million shares the following month.
BofA CEO Brian Moynihan didn't seem too concerned about Berkshire's selling, calling Buffett "a great shareholder".
Despite the news, Bank of America shares actually rose 5% on the day.
This is a significant increase, considering the bank stocks are up about 25% year-to-date.
Here's a brief timeline of Berkshire's stake in Bank of America:
- Berkshire Hathaway began trimming its stake in Bank of America in July.
- Berkshire dumped the bank's stock in mid-July and shed another 5.8 million shares the following month.
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