Selling for 6 consecutive days! Berkshire Hathaway holds a record amount of cash, still determined to reduce its holdings in beloved Bank of America

Berkshire Hathaway, owned by Warren Buffett, sold more shares of American banks this week, reducing its holdings in the bank for six consecutive trading days.

The latest regulatory filings show that Berkshire Hathaway sold Bank of America shares on Monday, Tuesday, and Wednesday this week, totaling 18.9 million shares with a trading value of $802.5 million, at an average selling price of $42.46 per share. Over the past six trading days, Berkshire has sold $2.3 billion worth of Bank of America shares, totaling 52.8 million shares.

Following Buffett's latest selling news, Bank of America's stock price fell by 1.2% on Thursday, greater than the S&P 500 index's 0.5% decline.

Bank of America is Berkshire's second-largest holding. Currently, Berkshire still holds 980.1 million shares of Bank of America, with a total market value of approximately $41.3 billion, much lower than its largest holding, Apple, with a stock value of $172.5 billion.

When Berkshire's ownership in any company exceeds 10%, it must disclose its stock transactions within two working days after the transaction. After the latest sales, Berkshire's ownership in Bank of America has dropped to 12.5%, still above the 10% disclosure threshold required by regulations.

This is the first time Berkshire has reduced its holdings in Bank of America since the fourth quarter of 2019. In 2022, Berkshire has exited several long-held bank stocks, including JPMorgan Chase, Goldman Sachs, Wells Fargo, and US Bancorp, but not Bank of America.

Buffett's selling this year occurred one day after Bank of America announced its Q2 earnings. Last week, Bank of America reported second-quarter earnings that exceeded analysts' expectations in both revenue and profit.

In fact, just last year, Buffett highly praised Bank of America's leadership, saying, "Many years ago, I voluntarily joined, and they made a very good deal for us. I really like Brian Moynihan (Bank of America CEO), I don't want to sell it."

Some analysts believe that Buffett's reduction in Bank of America holdings may be related to concerns about valuation. Bank of America's stock performance has outperformed the overall US stock market so far this year. As of Thursday's trading, Bank of America's stock price has risen by about 26% year-to-date, while the S&P 500 index has risen by about 15%. The current price of Bank of America is approaching the levels before the major US stock market decline in early 2022. When Bank of America's stock price hit a low point last year, it was nearly halved from the high of 2022.

Furthermore, analysts believe that locking in holding gains at favorable tax rates may also be a possible reason. Previously, Berkshire sold some of its Apple holdings based on this reason.

Regardless of the reasons, based on Buffett's style, once the selling starts, it is likely to continue for a considerable period.

Looking at Berkshire's financial report released in early May this year, in the first quarter, Berkshire sold nearly $20 billion of holdings in other listed companies' stocks, while only buying $2.7 billion. By the end of the first quarter, Berkshire's cash reserves further increased to $189 billion, setting a new record high since the fourth quarter of last year Over an extended period of time, Buffett has been a net seller in the stock market in recent quarters, with a net sale of $24.2 billion in the stock portfolio in 2023