Berkshire Hathaway's Greg Abel Reduces Bank of America Stake for Seventh Consecutive Quarter
Following Warren Buffett's strategy, the new CEO has trimmed the position as Bank of America's valuation moves from a discount to a premium over book value.
Berkshire Hathaway's first-quarter operating results released on 2 May indicate that Greg Abel, the company's new chief executive, has sold shares of Bank of America for a seventh consecutive quarter. This divestment trend marks a continuation of the strategy initiated by Warren Buffett, who systematically reduced his stake by 50 per cent over the six quarters preceding his retirement.
The decision is reflected in the company's financial notes, which show the cost basis for the Banks, insurance, and finance sector fell from $15.454 billion to $14.685 billion between 31 December and 31 March. While the formal Form 13F filing detailing specific trades will be submitted to regulators by 15 May, these internal figures provide early evidence of the portfolio adjustments made by Abel since taking over responsibility for the $327 billion investment portfolio on 31 December 2025.
The reduction in the banking sector comes against a backdrop of significant valuation shifts for the financial giant. When Buffett first acquired a stake in Bank of America's preferred stock in the summer of 2011, the common stock was trading at a 62 per cent discount to its listed book value. By the end of 2025, however, Bank of America shares were valued at a 43 per cent premium to book value, removing the deep discount that originally attracted the value-focused investor.
Abel and his team are known for their unwavering desire to secure favourable deals, a principle that has guided Berkshire's approach to this holding for decades. Although Bank of America remains a major component of the investment portfolio, the premium pricing suggests the stock is no longer the screaming bargain that defined the Oracle of Omaha's initial entry point.
This move occurs as Berkshire Hathaway prepares for its annual shareholder meeting, which typically serves as a platform for discussing the economy and the 48-stock investment portfolio. Under Abel's leadership, the focus remains on managing the day-to-day operations and the substantial assets under management, with the quarterly results offering the first clear signal of his trading philosophy in action.
The divergence in valuation metrics highlights the changing landscape for large-cap banks in the current market environment. As institutions continue to monitor the activities of Wall Street's most prominent managers, the consistent selling by both Buffett and Abel underscores a strategic reassessment of the banking sector's risk-reward profile.
