When Warren Buffett dramatically trimmed his Apple holdings, Stephanie Link, chief investment strategist and portfolio manager at Hightower Advisors, followed suit. She agreed with Buffett that the time was right for profit taking—not least because she thinks the AI-equipped iPhone 16 will not be the “gamechanger” Apple hopes—but, when it comes to another of the Oracle of Omaha’s stock sell-offs, Link decided to stand pat.
That stock is Bank of America[/hotlink], which Buffett’s Berkshire Hathaway has been dumping en masse. Even though the conglomerate still holds a large position, it sold about $9 billion worth of BoA shares from July through September. Link told Fortune, however, that she is holding on to the stock.
“A lot of people are bullish on financials,” said Link, who manages a $3.5 billion equity portfolio. “I’ve been bullish on financials for the full year. [I] was a bit wrong in the beginning of the year. It’s taken a little bit of time to see some catch up.”
Bank stocks surged broadly on Trump’s win, with investors anticipating deregulation and pent-up M&A demand to be unlocked under his second administration. Shares of Bank of America are up over 10% since election day, essentially mirroring the return of the S&P 500’s industry index.
Link admits she doesn’t like being on the opposite side of America’s most revered investor. Buffett’s $5 billion investment in BofA shortly after the financial crisis served as a major vote of confidence in the second-largest bank in the U.S. and its CEO, Brian Moynihan, who he has long praised.
Admittedly, Buffett’s stock sales are likely not an indication he believes BofA is doomed. After all, it remains Berkshire’s third-largest holding.
It appears a major motivation behind the sell-off was to bring Berkshire’s stake under the 10% threshold that requires rapid disclosure of purchases and sales. When BofA repurchased $3.5 billion of stock in October, putting Berkshire back up above that number, Buffett’s conglomerate sold an additional $370 million in shares.
Nonetheless, the Oracle is now sitting on a record hoard of cash and treasuries worth $325 billion, creating suspicion that he is increasingly worried about risk and believes the stock market is overvalued.
“I worry when I don’t worry,” Link said of her mindset, “because that means we’re complacent.”
Reasons to be bullish on banks
Nonetheless, she has a mostly rosy…
Click Here to Read the Full Original Article at Fortune | FORTUNE…
