Legendary investor Warren Buffett has continued his unprecedented stock selloff, unloading nearly $1 billion in Bank of America shares.
This latest decision comes amid growing investor anxiety over a potential global recession and increasing scrutiny of the Biden administration’s economic policies.
As of the end of June, Berkshire Hathaway, Buffett’s investment firm, boasted a staggering cash reserve of $278 billion—a figure that has surged 65% since the beginning of the year.
According to financial analysis platform Finimize, this marks the steepest relative cash position for Berkshire since 2005, just before the onset of the global financial crisis.
According to the outlet, “While you could argue that Buffett was too early in slashing his market exposure back then, since he missed out on two years of gains, in the end, it was a sensible risk-reward tradeoff. The move allowed him to avoid deeper losses during one of the worst bear markets in history and gave him a cash pile he could use to scoop up investments at bargain prices during the crisis. To be sure, Buffett has always balked at the notion that he can somehow predict the future or time the market.”
The first Monday in August saw panic grip the finance sector as nearly $2 trillion was wiped from the S&P 500 at market open. Investor fears surrounding an impending global recession triggered a massive sell-off, with U.S. stock futures plunging dramatically.
On August 5th, S&P 500 futures fell over 4.4%, Dow futures dropped by 3%, and Nasdaq 100 futures plummeted more than 5.2%.
Buffett’s decision to sell nearly half of Berkshire’s gigantic Apple stake last quarter, combined with his aggressive liquidation of other equities totaling over $75 billion in the second quarter alone, has further rattled the markets.
Notably, in July, Buffett began trimming his second-largest holding, Bank of America, and now, he had sold an additional $981.9 million in shares of the lender.
Reuters reported:
Billionaire Warren Buffett’s Berkshire Hathaway has sold some more shares of Bank of America (BAC.N), opens new tab over the past few days, raking in $981.9 million, as the conglomerate continues to trim down its stake in the second-largest U.S. lender.
Berkshire has now shed about $5.4 billion worth of Bank of America shares in a string of sales since mid-July.
The conglomerate sold about 24.7 million shares of the lender between Aug. 23 and Aug. 27, according to a regulatory filing on Tuesday.
