Warren Buffett (Trades, Portfolio)’s company, Berkshire Hathaway (BRK, Financial), has made a substantial profit of $10 billion from selling shares of Bank of America (BAC, Financial), as recent SEC filings show. Over the past three months, Buffett reduced his stake in the bank from 13.1% to 10.1%.
Buffett first invested in Bank of America in 2011 during the recovery from the 2008-09 financial crisis, spending $5 billion. This investment has grown significantly, with the shares originally purchased at $14 now trading at $40, yielding an impressive 185% gain. This sell-off came just after the shares reached a yearly high of $44.4 in July, following the bank’s positive financial report for the second quarter.
The exact reasons why Buffett is selling some of his shares are not clear, as he has not made any public comments on this decision. Analysts are speculating various motives, including possible concerns about the bank’s future, preparing for a downturn in the market, or simply taking profits from a successful investment.
Despite the sale, Bank of America is still a major part of Berkshire Hathaway’sinvestment portfolio, holding 784.55 million shares, worth about $31.46 billion. This move reflects a careful yet strategic approach to investing, and market watchers are eager to see what he will do next.
This article first appeared on GuruFocus.