FRI, SEP 27, 2024

WARREN BUFFETT WATCH

BofA sales top $9B as stake gets even closer to 10% veil of secrecy

Berkshire Hathaway brought in another $1.3 billion by selling 33.2 million shares of Bank of America over six sessions from last Friday through today.

That puts its current selling streak at nine sessions. Since it began to cut its holding in mid-July, it has sold shares during 36 of the past 52 sessions.

In total, it has added $9.4 billion to its already enormous cash pile by selling 230.2 million shares. That decreased its position by 22.3%.

It still owns 802.7 million shares valued at $31.6 billion, 10.3% of BAC's outstanding shares.

As long as Berkshire owns 10% or more of the bank's stock, it has to disclose any sales or purchases within two business days to comply with an SEC rule.

If the stake drops below 10%, and that appears likely at this point, it will have to disclose the sale that takes it under that level, but it won't have to report any additional reductions until its quarterly portfolio snapshot.

Barron's Andrew Bary predicts the selling may stop at 700 million shares.

In 2017, Berkshire started its BofA stake with 700 million very low-priced shares it bought with warrants that were part of a 2011 investment.

Selling any of the original 700 would generate a much bigger tax hit than it is incurring by unloading the shares it bought later at higher prices.

Berkshire is one of two insurers raising exposure to fossil fuel stocks - WSJ

Berkshire Hathaway and State Farm are on one side of what The Wall Street Journal calls a "deep divide [that] is emerging among insurers over their investments in fossil fuels."

This week, the newspaper said its analysis of data from state regulators shows purchases of fossil fuel energy stocks by Berkshire and State Farm have been "so big that [they] helped offset a decline in the rest of the industry."

It reports that in 2014, the median percentage of fossil fuel stocks in the portfolios of insurers was 3.4%. Last year, it was 1.8%.

But, says the Journal, "The increases from State Farm and Berkshire drove the industry's overall exposure to fossil fuels higher, pushing it to 4.4% of their portfolios from 3.8%."

The value of those holdings increased to $84.6 billion last year from $57 billion in 2014 due to higher stock prices and buying by the two insurers.

Buffett's big bet on Occidental Petroleum, currently valued at $13 billion, "accounted for 85% of the increase from 2014 to 2023 in spending on fossil-fuel investments by insurers as a whole," according to the newspaper.

He appears, however, to have lost some enthusiasm for the stock.

Since Berkshire began to build its stake in early 2022, it has often added to its position when the stock fell to around $60, as it did in June.

Since then, OXY's price has dropped through the $50s, hitting an intraday low of $49.75 yesterday, with no Berkshire buying reported, at least so far.

Any new moves would have to be disclosed promptly because Berkshire owns more than 10% of OXY shares.

BUFFETT AROUND THE INTERNET

Some links may require a subscription

CNBC.com: What Warren Buffett’s recent moves say – and don’t say – about today’s market

Forbes: Warren Buffett Has It Right - Time In The Market Trumps Market Timing

HIGHLIGHTS FROM THE ARCHIVE

'People on the extremes of both sides are a little nuts' (2021)

Warren Buffett says Chevron is not an “evil company” and he has “no compunction in the least” having Berkshire own a sizable stake in the oil giant. But that doesn’t mean he’s dismissing concerns about climate change.

BERKSHIRE STOCK WATCH

Four weeks

Twelve months

BERKSHIRE'S TOP U.S. STOCK HOLDINGS - Sep. 27, 2024

Berkshire's top holdings of disclosed publicly traded stocks in the U.S., Japan, and Hong Kong, by market value, based on today's closing prices.

Holdings are as of June 30, 2024 as reported in Berkshire Hathaway's 13F filing on August 14, 2024, except for:

Bank of America, which is as of September 27, 2024
Mitsubishi, which is as of June 12, 2023. Tokyo Stock Exchange prices are converted to U.S. dollars from Japanese yen.

The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.

QUESTIONS OR COMMENTS

Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don't forward questions or comments to Buffett himself.)

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Also, Buffett's annual letters to shareholders are highly-recommended reading. There are collected here on Berkshire's website.

-- Alex Crippen, Editor, Warren Buffett Watch

900 Sylvan Avenue, Englewood Cliffs, NJ 07632

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