Did Warren Buffett Make a Mistake by Selling This Cheap, High-Yield Stock?
Earlier this month, Warren Buffett and his company, Berkshire Hathaway, disclosed what stocks they held at the end of the fourth quarter of 2024 in the company's 13F filing. Investors eagerly await this filing to see what moves the Oracle of Omaha and his team of investing lieutenants made each quarter. In 2024, Berkshire sold many more stocks than it purchased, signaling they view the market as overvalued and aren't seeing many opportunities.However, one of the company's moves in the fourth quarter caught me off guard: Berkshire dumped 73% of its stake in Citigroup (NYSE: C), previously a top-20 position in Berkshire's portfolio. Citigroup has done significant work to improve the company in recent years, the stock is still cheap, and has a healthy dividend yield or roughly 3%. Did Buffett make a mistake?Buffett and the Berkshire team have long been buyers of bank stocks. In fact, you'd be hard-pressed to find a major Wall Street bank stock that Berkshire hasn't owned in the 21st century. However, Buffett began to sour on the industry following the onset of the pandemic, when he sold many of his large bank holdings. Berkshire has also been selling major chunks of its stake in Bank of America, a trend that continued in the fourth quarter.Continue reading
Earlier this month, Warren Buffett and his company, Berkshire Hathaway, disclosed what stocks they held at the end of the fourth quarter of 2024 in the company's 13F filing. Investors eagerly await this filing to see what moves the Oracle of Omaha and his team of investing lieutenants made each quarter. In 2024, Berkshire sold many more stocks than it purchased, signaling they view the market as overvalued and aren't seeing many opportunities.
However, one of the company's moves in the fourth quarter caught me off guard: Berkshire dumped 73% of its stake in Citigroup (NYSE: C), previously a top-20 position in Berkshire's portfolio. Citigroup has done significant work to improve the company in recent years, the stock is still cheap, and has a healthy dividend yield or roughly 3%. Did Buffett make a mistake?
Buffett and the Berkshire team have long been buyers of bank stocks. In fact, you'd be hard-pressed to find a major Wall Street bank stock that Berkshire hasn't owned in the 21st century. However, Buffett began to sour on the industry following the onset of the pandemic, when he sold many of his large bank holdings. Berkshire has also been selling major chunks of its stake in Bank of America, a trend that continued in the fourth quarter.
