Berkshire Hathaway Exits Citigroup, Cuts Bank of America Stake by 7% in Q1 2024

In the first quarter of 2024, Berkshire Hathaway, led by Warren Buffett, made significant adjustments to its investment portfolio, particularly in the banking sector. The company sold off all of its shares in Citigroup, totaling 14,639,502 shares, completely exiting its investment in the bank. Additionally, Berkshire reduced its stake in Bank of America by 48,660,056 shares, decreasing its holding by more than 7%. Despite these reductions, Berkshire still holds over 631.5 million shares in Bank of America, remaining one of its significant shareholders. Furthermore, Berkshire decreased its holdings in First Capital Credit by 300,000 shares, a reduction of approximately 4%.

These moves indicate a strategic shift in Berkshire's investment strategy, potentially signaling a reduced confidence in the banking sector's prospects. The decision to exit Citigroup and reduce holdings in Bank of America comes at a time when the banking sector faces numerous challenges, including regulatory pressures, economic uncertainties, and the impact of ongoing trade tensions. These factors could be influencing Berkshire's decision to reallocate its investments away from traditional banking stocks.

Berkshire Hathaway's actions in the first quarter also highlight its continued focus on other sectors. The firm maintained its significant holdings in Apple, indicating a preference for companies with strong brand recognition and stable earnings. Additionally, Berkshire increased its stake in Constellation Brands, a well-known alcohol manufacturer, by 6,384,676 shares, increasing its holding by 113% and bringing the total to 12,009,000 shares. This move suggests a diversification into the consumer goods sector, particularly in the alcohol industry.

The reduction in banking investments does not necessarily imply a bearish outlook on the sector as a whole. Instead, it may reflect Berkshire's assessment of individual companies' performance and future growth potential. The firm's decision to exit Citigroup and reduce its stake in Bank of America could be driven by specific concerns about these companies' financial health, competitive positioning, or strategic direction. Berkshire's continued investment in Apple, despite previous reductions, underscores its confidence in the tech giant's long-term prospects.

Overall, Berkshire Hathaway's first-quarter moves in the banking sector underscore the firm's dynamic investment approach. By reallocating capital away from banking stocks, Berkshire is positioning itself to capitalize on opportunities in other sectors while managing risks associated with the banking industry's current challenges. This strategic shift is consistent with Buffett's long-term investment philosophy, which emphasizes value, stability, and growth potential. The firm's decision to increase its stake in Constellation Brands further demonstrates its commitment to diversifying its portfolio and investing in companies with strong market positions and growth prospects.