Warren Buffett's Berkshire Hathaway made a shrewd move by selling off a significant portion of its bank stocks since the start of 2020. The company exited several lenders, many of which saw substantial declines in their stock prices in 2023. While Berkshire still holds some bank positions, its banking and financial stocks accounted for a smaller portion of its portfolio in June 2023 compared to the previous year.
Buffett cited concerns about banks inflating profits, misleading investors, and making fundamental errors in their operations as reasons for his decision to sell. The banking sector has faced challenges, including the fear of another regional banking crisis, concerns about commercial real estate exposure, and economic uncertainties. While Berkshire hasn't completely abandoned banks, it appears to have reduced its exposure to this sector, with Bank of America remaining one of its top holdings.
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