Warren Buffett's Berkshire Hathaway Reduces Stake in Bank of America, Buys into Two Stocks

Warren Buffett sold 41% of Berkshire's stake in Bank of America, reducing his company's holding to 427 million shares. Buffett has been selling stocks for almost three years, totaling $177.4 billion. Despite this, he purchased shares of two magnificent stocks for a fourth straight quarter, indicating a focus on value investing and potential interest rate cuts by the Federal Reserve.

Title: Warren Buffett's Strategic Capital Allocation: Selling Bank of America and Piling into Domino's Pizza

Warren Buffett, the legendary investor and CEO of Berkshire Hathaway, has been making significant changes to his investment portfolio. According to recent Form 13F filings, Buffett has sold 41% of Berkshire's stake in Bank of America (BAC), reducing his company's holding to approximately 427 million shares. This move comes after a period of consistent stock sales, totaling $177.4 billion over nearly three years. Despite this, Buffett has continued to make strategic purchases, highlighting his focus on value investing and potential interest rate cuts by the Federal Reserve.

The sale of Bank of America shares, which was once Berkshire's second-largest holding by market value, suggests that Buffett may no longer view the stock as a bargain. The company's stock has moved from a 62% discount to book value in 2011 to a 36% premium as of now. Additionally, the potential impact of interest rate cuts by the Federal Reserve on Bank of America's interest income could be a factor in Buffett's decision to reduce his stake.

Despite these sales, Buffett has been selectively purchasing shares of two top-performing companies for a fourth consecutive quarter. One of these is Domino's Pizza (DPZ), a fast-food restaurant chain that has been purchased every quarter over the last year. Berkshire Hathaway has built up a 7.8% stake in Domino's Pizza, attracted by the company's robust capital-return programs, transparent marketing, and innovation. Domino's has also shown strong growth, meeting or exceeding its five-year initiatives, including its latest venture "Hungry for MORE," which leverages artificial intelligence to improve production and streamline the supply chain.

The other company Buffett has been piling into is Pool Corp. (POOL), a wholesale pool supplies and related equipment distributor. Pool Corp. has gained nearly 47,000% since its public debut, making it a popular buy for Buffett. His consistent purchases of Pool Corp. shares over the last year indicate his confidence in the company's growth prospects and potential for future returns.

Buffett's strategic capital allocation demonstrates his commitment to value investing and his ability to adapt to changing market conditions. While he has been selling stocks, he has also been making selective purchases that align with his long-term investment philosophy. This approach underscores his belief in the importance of capital allocation and his ability to identify undervalued opportunities.

References
[1] https://www.kiplinger.com/investing/warren-buffett-quotes-for-investors-to-live-by
[2] https://finance.yahoo.com/news/billionaire-warren-buffett-sold-41-075100409.html