In a significant shift in its investment strategy, Berkshire Hathaway, led by Warren Buffett, has reduced its stake in several major banks and exited certain positions in the stock market. The company's latest regulatory filing reveals a substantial reduction in its Bank of America shares and other financial institutions. Additionally, Berkshire Hathaway has shown restraint in acquiring new stocks, adding only one new position in Constellation Brands. This move reflects the ongoing challenge of finding attractive investment opportunities in a robust market environment.

Warren Buffett, the renowned investor, and his team at Berkshire Hathaway have made notable adjustments to their portfolio in recent months. By the end of December 2024, the conglomerate had significantly pared down its holdings in Bank of America, reducing its stake from over 1 billion shares to just 680 million shares. This reduction brought Berkshire’s ownership percentage from more than 13% to below 9%, with the value of this holding dropping from approximately $41 billion to under $30 billion. These changes highlight the company's strategic realignment in response to market conditions.

Beyond Bank of America, Buffett and his investment managers also divested from other financial institutions. They sold 74% of their Citigroup shares, 18% of their Capital One holdings, and 54% of their Nu Holdings position. Furthermore, they trimmed stakes in companies like Charter Communications, Louisiana-Pacific, and T-Mobile US. Notably, they exited Ulta Beauty, which they had acquired only a few months earlier. In contrast, they initiated a substantial $1.2 billion investment in Constellation Brands, a leading producer of alcoholic beverages.

The company also increased its holdings in Domino’s Pizza by 86% and Pool Corp by 48%, expanding on positions opened in the previous quarter. Additional investments were made in Occidental Petroleum, Verisign, and SiriusXM. Despite these cuts, the overall value of Berkshire’s U.S. stock portfolio edged up to $267 billion, as some existing positions gained value.

This portfolio update underscores a consistent trend from previous quarters. Berkshire Hathaway sold $133 billion worth of stocks in the first nine months of 2024 while purchasing less than $6 billion in new stocks. The company also spent less than $3 billion on share buybacks during this period, compared to nearly $70 billion over the preceding four years. Consequently, Berkshire’s cash reserves surged from $168 billion to over $300 billion for the first time.

Buffett is well-known for making large-scale investments in public companies such as Apple and acquiring significant businesses like Pilot Travel Centers. However, he has acknowledged that high valuations have made it increasingly difficult to find compelling deals. Higher interest rates have further influenced the decision to hold more cash and invest in Treasurys, which have become more attractive. Berkshire’s Class B stock closed at nearly $480, marking a 6% increase year-to-date and an almost 18% rise over the past 12 months.