Have you ever wondered how a legendary investor like Warren Buffett, through his company Berkshire Hathaway, manages his vast portfolio? Specifically, what's the deal with his investment in Bank of America? It's a question that many aspiring investors and market watchers ponder! Let's dive deep into the fascinating world of Berkshire Hathaway's stake in Bank of America, unraveling the numbers, the history, and the strategy behind it.
Understanding Berkshire Hathaway's Investment in Bank of America
Berkshire Hathaway, under the shrewd guidance of Warren Buffett, has been a significant holder of Bank of America (BAC) shares for many years. However, their stake isn't static; it's a dynamic position that evolves based on market conditions, Buffett's assessment of value, and strategic portfolio adjustments.
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| How Many Shares Of Bank Of America Does Berkshire Hathaway Own |
Step 1: Delving into the Recent Numbers – How Many Shares as of Mid-2025?
As of May 2025 (based on the latest 13F filing from May 15, 2025, covering Q1 2025), Berkshire Hathaway's Bank of America shares were valued at roughly $26.4 billion. This made Bank of America one of Berkshire's top holdings, though it has seen some reduction.
It's important to note that Berkshire Hathaway has been reducing its stake in Bank of America since mid-July 2024. What was once a position of over 1.03 billion shares has been reduced by more than 401 million shares, or approximately 39%, as of early June 2025. This persistent selling has moved Bank of America from being Berkshire's second-largest holding to the fourth position in its $276 billion portfolio (as of late May 2025), behind Apple, American Express, and Coca-Cola.
This reduction has been significant, with reports indicating sales of hundreds of millions of shares over the past year. For instance, between July 17, 2024, and December 31, 2024, Berkshire oversaw the sale of over 352 million shares. As of August 2024, Berkshire still held around 921.7 million shares after a significant sale. While the exact number of shares can fluctuate slightly with daily trading, the trend has been a clear reduction.
Step 2: A Glimpse into the History – How the Bank of America Stake Came to Be
The story of Berkshire Hathaway's investment in Bank of America is a classic example of Warren Buffett's opportunistic and long-term value investing approach.
Tip: Don’t overthink — just keep reading.
Sub-heading 2.1: The 2011 Crisis-Era Investment
Berkshire Hathaway first made a major investment in Bank of America in August 2011, during a period of significant financial turmoil and market uncertainty. Buffett orchestrated a $5 billion capital infusion into BofA in the form of preferred stock, which also came with warrants. These warrants gave Berkshire the option to purchase up to 700 million shares of Bank of America common stock at a strike price of just $7.14 per share.
This was a classic Buffett move: investing in a strong company that was temporarily undervalued due to broader market fear.
Sub-heading 2.2: Exercising the Warrants and Increasing the Stake
In mid-2017, Buffett decided to exercise those warrants, converting the preferred stock into common shares. This significantly boosted Berkshire's ownership in Bank of America. Over the years that followed, Berkshire continued to build its position, becoming one of Bank of America's largest shareholders. At its peak, Berkshire's stake exceeded 1 billion shares.
Step 3: Understanding the "Why" Behind the Recent Sales
While Warren Buffett is known for his "forever" holding philosophy, even the Oracle of Omaha makes adjustments. The recent sales of Bank of America shares by Berkshire Hathaway have prompted much discussion. Several factors could be at play:
Sub-heading 3.1: Benign Profit-Taking
One of the most plausible reasons for the recent selling is profit-taking. When Buffett initially acquired the warrants in 2011, Bank of America's common stock was trading at a deep discount to its book value. Since then, the stock has appreciated significantly. With the peak marginal corporate income tax rate at its lowest level since 1939, locking in gains at an advantageous rate would be a very Buffett-like move.
Tip: Don’t skim — absorb.
Sub-heading 3.2: Valuation Concerns
Warren Buffett is an unwavering value investor. When he first invested, Bank of America was trading at a substantial discount to its book value. More recently, the stock has been trading at a premium to its book value. While still a strong company, it might no longer present the "screaming bargain" it once was in Buffett's eyes.
Sub-heading 3.3: Interest Rate Sensitivity
Bank of America is known to be one of the most interest-sensitive money-center banks. While it benefited significantly when the Federal Reserve rapidly increased interest rates between 2022 and 2023, a rate-easing cycle (which has been anticipated) could negatively impact its net interest income. This sensitivity might be another factor influencing Buffett's decision to trim the position.
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Sub-heading 3.4: Reallocation to Other Opportunities
Berkshire Hathaway has also been building up stakes in other companies, particularly consumer brands like Domino's Pizza. It's possible that some of the proceeds from the Bank of America sales are being reallocated to these new opportunities where Buffett sees more compelling value or growth potential.
The Long-Term Perspective
Despite the recent sales, Bank of America remains a core holding for Berkshire Hathaway. It signifies Buffett's continued belief in the long-term prospects of the banking sector and Bank of America specifically, even if its relative attractiveness has shifted. Berkshire Hathaway's actions often influence market sentiment, and while the sales are noteworthy, they don't necessarily indicate a loss of all confidence in Bank of America.
10 Related FAQ Questions
How to understand Berkshire Hathaway's 13F filings?
13F filings are quarterly reports filed by institutional investment managers with the SEC, disclosing their equity holdings. To understand them, look for the most recent filing date (usually within 45 days after the end of a quarter), identify the ticker symbols of companies listed, and check the number of shares held and their market value.
QuickTip: Stop scrolling, read carefully here.
How to track Warren Buffett's latest stock moves?
While you can't track his moves in real-time, you can follow Berkshire Hathaway's 13F filings, which are released quarterly. Financial news outlets and investment websites often analyze these filings and provide timely updates on significant changes in his portfolio.
How to interpret a reduction in a long-held stock by Warren Buffett?
A reduction doesn't always mean a lack of faith in the company. It could be due to profit-taking, rebalancing the portfolio, a change in valuation attractiveness, or a strategic shift to allocate capital to more compelling opportunities elsewhere.
How to learn more about Warren Buffett's investment philosophy?
Read his annual letters to Berkshire Hathaway shareholders, which are rich with insights. Books like "The Intelligent Investor" by Benjamin Graham (Buffett's mentor) and biographies about Buffett also offer deep dives into his value investing principles.
How to identify "value" in a stock, as Buffett does?
Value investing involves looking for companies whose intrinsic value is higher than their current market price. This often includes analyzing a company's financial statements, management quality, competitive advantages (economic moats), and long-term earnings power.
How to invest like Warren Buffett if you have limited capital?
Consider investing in low-cost S&P 500 index funds or exchange-traded funds (ETFs). Buffett himself has recommended index funds for most investors, as they offer broad diversification and reflect the overall growth of American business.
Tip: Read mindfully — avoid distractions.
How to find out the current percentage of Bank of America shares owned by Berkshire Hathaway?
You can typically find this information in the latest 13F filings from Berkshire Hathaway, as well as in financial news reports that analyze these filings. The percentage owned can fluctuate as share counts change or as Berkshire buys/sells.
How to analyze a bank stock like Bank of America?
Look at key metrics like net interest income, loan growth, deposit growth, asset quality (non-performing loans), capital ratios (e.g., Common Equity Tier 1 - CET1), return on equity (ROE), and the bank's dividend payout and history.
How to understand the impact of interest rates on bank profitability?
Generally, rising interest rates can increase a bank's net interest income (the difference between what it earns on loans and pays on deposits). Conversely, falling interest rates can put pressure on this income. This makes banks somewhat sensitive to monetary policy.
How to access Berkshire Hathaway's official filings?
All public company filings, including Berkshire Hathaway's 13F and 10-K (annual reports), are available on the U.S. Securities and Exchange Commission (SEC) EDGAR database (www.sec.gov).
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