| | | | But what's my point?
If Warren Buffett is buying something it's typically a solid investment — period.
And if he's selling something there's probably a reason why.
It was just released that Berkshire Hathaway, Warren Buffett's company filed for the sale of another 14,000,000 shares of Bank of America (BAC), totaling about $550.7 million.
This comes after several other sales of Bank of America shares from Berkshire. In fact, Berkshire has now sold over 4 billion worth of Bank of America shares since the end of the second quarter.
So that could mean one of two things:
1. Berkshire Hathaway is trying to stack up cash to make some big purchases soon.
2. Berkshire is growing increasingly bearish on Bank of America and is selling out while shares are up.
Those are just a couple of guesses but either one or both could be as likely of reasons.
So, where does this leave us?
Well, if you've been looking at trading Bank of America, you might just want to hold off on the bullish bets…
While I am in no way recommending anything to either side, in times like this I historically wouldn't go betting against Warren Buffett and expect BAC shares to go up — but that’s just me.
If somebody wanted to play this to the downside, they could certainly buy some puts and hope for bearish activity on Bank of America. While the stock is up about 13% this year, it's fallen over 8% in the past month, and 2% in the past week following the news of Buffett's selling activity.
So, the bearish trend may be beginning.
— Nate Tucci
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