Buffett Cuts Bank of America Stake

Warren Buffett, the renowned investor and CEO of Berkshire Hathaway, has expressed strong confidence in Bank of America (BofA), citing its business model, valuation, and management as key factors in his investment. However, recent valuation concerns have emerged, as Berkshire's cost basis for its BofA shares was approximately $14.15 each, totaling around $14.6 billion by the end of 2021. As of late March, the value of this holding surged to $39.2 billion, with BofA shares closing at $41.67 on Friday. Tax implications may also play a role in Buffett's decision-making regarding BofA. Earlier this year, he sold a portion of his Apple stake, suggesting that he might be looking to mitigate potential tax liabilities in anticipation of rising corporate tax rates. During Berkshire's annual meeting in May, Buffett remarked on the ease of paying taxes at the current rate of 21%, indicating a strategic approach to managing his investments in light of future tax changes. Buffett's investment in Bank of America is not only financially significant but also carries a personal anecdote that adds to its charm. He famously conceived the idea for the investment while in the bathtub, leading to a serendipitous connection with BofA CEO Brian Moynihan. Their initial communication was humorously interrupted by a call center representative, but the deal was finalized swiftly once they connected directly. As Buffett navigates the complexities of investment and taxation, his relationship with Bank of America remains a notable chapter in his storied career.