Source:Securities Times Original title: "Panic Index Soars! Buffett Sells Again!"

It is worth noting that since September, the Chicago Board Options Exchange (CBOE) Volatility Index ($CBOE Volatility S&P 500 Index (.VIX.US)$ ) has skyrocketed, rising about 49% last week. As the interest rate meeting approaches, it seems that investors need to find more clear information and confidence from the economic outlook and the Federal Reserve's monetary policy, to see if the volatility risk has not been completely released.

He cashed out nearly $7 billion.

According to a new document submitted to the SEC, Berkshire Hathaway sold a total of 18.746 million shares of Bank of America stock, cashing in approximately $0.76 billion on September 3rd, 4th, and 5th, 2024 over three consecutive trading days.

Currently, Berkshire Hathaway remains the largest shareholder of Bank of America, holding approximately 11% of the shares, valued at approximately $33.5 billion based on the latest closing price. It is worth noting that if Buffett continues to sell Bank of America shares, the ownership percentage may soon fall below the regulatory threshold of 10%. According to relevant regulations, if the ownership percentage does not exceed 10%, Buffett will no longer need to disclose trading activities within two working days like now, usually requiring a few weeks for disclosure in quarterly reports.

According to previously released financial data, Bank of America's second quarter revenue increased by 1% to $25.4 billion, exceeding the market's expected $25.2 billion; earnings per share were $0.83, higher than the market's general expectation of $0.80. After Bank of America's second quarter earnings exceeded expectations, the stock price also hit a two-year high on July 16th. The day after the stock price hit a new high, Berkshire Hathaway began the continuous sell-off for nearly 2 months.

In July, Berkshire Hathaway conducted a large-scale sell-off of Bank of America stock. Throughout July, the company sold approximately $3.825 billion worth of Bank of America stock.

In August, Berkshire Hathaway's selling activities continued. From August 15th to 19th, they sold approximately $0.55 billion of Bank of America stock; from August 23rd to 27th, they sold approximately $0.9819 billion of stock; from August 28th to 30th, Berkshire Hathaway further sold approximately 21 million shares of Bank of America stock, cashing in approximately $0.848 billion. In July and August, Berkshire Hathaway's total cashed in amounts to approximately $6.205 billion.

Entering September, Buffett's sale of Bank of America stock did not stop, as Berkshire Hathaway sold a total of 18.746 million shares of Bank of America stock, cashing in approximately $0.76 billion over three consecutive trading days on September 3rd, 4th, and 5th, 2024.

In conclusion, Berkshire has cashed out approximately $6.97 billion since selling US bank stocks on July 17th.

The 94-year-old Buffett purchased preferred shares and warrants of Bank of America at a price of $5 billion in 2011, initiating his investment in the bank. His Berkshire Hathaway company eventually became the largest shareholder of the bank and has maintained this position. He previously stated that he bought Bank of America because he had confidence in CEO Brian Moynihan's ability to restore the bank's health after the 2008 financial crisis.

Analyst: Buffett's start to reduce his 'perpetual holdings' raises concerns.

Warren Buffett's Berkshire Hathaway has performed exceptionally well in the past year, with an impressive annualized return rate of 32%, far exceeding the S&P 500 index. On August 28th, it became the first non-tech US company in a market cap exceeding $1 trillion. However, Buffett's recent divestments in Apple and Bank of America have raised concerns in the market regarding his long-term investment strategy. Buffett started investing in Bank of America in 2011 and showed confidence in the bank's recovery after the financial crisis. Nevertheless, his recent stock divestments seem to contradict his previously held long-term holding strategy.

Based on Buffett's habit, when he starts selling a stock, he eventually clears out that stock. Moreover, in recent years, Berkshire has cleared its holdings in multiple banks, including$U.S. Bancorp (USB.US)$and$Wells Fargo & Co (WFC.US)$N/A.$Bank of New York Mellon (BK.US)$.

Market analyst and TheStreetPro columnist Doug Kass expressed concern about Buffett's stock selling strategy, especially the reduction of holdings in stocks such as Apple and Bank of America, which are considered to be held permanently. He pointed out that Buffett significantly reduced his Apple shares in the second quarter of this year, selling almost half of his holdings, which may be an important statement to the market, indicating that his views on the market may have changed. In addition, Kass believes that Buffett's outlook on the US and global economy may be more pessimistic than what he publicly expresses.

In addition, Kass stated, 'Buffett's favorite stock market indicator has been issuing sell signals for several months.'

Generally speaking, if the 'Buffett indicator' is less than 50%, it represents that the stock market is severely undervalued; if it is between 75% and 90%, it represents a relatively reasonable valuation; if it exceeds 115%, it is considered severely overvalued. Currently, the indicator has exceeded 190% and is approaching the level of 200%. This indicator broke through the 200% level in February 2021, and Buffett warned that it would be 'playing with fire' if it surpasses this level. However, like other indicators, the 'Buffett indicator' also has its limitations, such as not taking into account high interest rates. Currently, the Federal Reserve's federal funds rate target is at its highest level in over 20 years.

As investors digest the evolution of the AI theme, semiconductor manufacturers like$NVIDIA (NVDA.US)$The volatility of stocks in other companies may continue to exist. For money managers who are looking for long-term investments, this may present an opportunity. Kas said that if someone were to give him new funds today, he would actively increase his holdings in AI-related stocks.

Editor/Emily