Investing Legend Warren Buffett Sold 45% of Berkshire Hathaway's Bank of America Stake and Bought Shares of This Consumer Favorite for 5 Consecutive Quarters Before Retiring

For decades, few investors captivated the attention of professional and everyday investors quite like Berkshire Hathaway's (NYSE: BRK.A)(NYSE: BRK.B) billionaire boss, Warren Buffett. During his roughly six-decade tenure at the helm, the Oracle of Omaha oversaw a nearly 6,100,000% cumulative return in Berkshire's Class A shares (BRK.A). Practically doubling the annualized total return, including dividends, of the benchmark S&P 500 since the mid-1960s made him an instant hit with investors.

While Warren Buffett remains the chairman of Berkshire's board, he officially stepped down from the CEO role at the end of 2025 and handed the baton to his predetermined successor, Greg Abel.

But just because he's no longer overseeing his trillion-dollar company's day-to-day operations, it doesn't mean Buffett stopped making moves to position Berkshire Hathaway for success before he retired.

Berkshire Hathaway's now-retired CEO, Warren Buffett. Image source: The Motley Fool.

Thanks to Form 13F filings with the Securities and Exchange Commission, we know what Buffett was up to in the quarters leading up to his retirement. A 13F is a required filing for institutional investors with at least $100 million in assets under management that details which stocks Wall Street's smartest and most successful money managers have been buying and selling.

One of the more eyebrow-raising moves leading up to Buffett's departure was his persistent selling of a core holding: Bank of America (NYSE: BAC). While Berkshire's outgoing boss was significantly reducing his company's stake in BofA, as Bank of America is commonly known, he was also building a position in a beloved consumer brand for five consecutive quarters (through Sept. 30, 2025).

Investing legend Warren Buffett cashes in his chips on Bank of America

For the better part of the last decade, Bank of America has been a top-three holding in Berkshire Hathaway's investment portfolio. There's arguably no sector Buffett understood better or was more comfortable putting his company's capital to work in than financials.

The beauty of bank stocks is that they're able to take advantage of the natural nonlinearity of economic cycles. Since periods of expansion last notably longer than recessions, bank stocks like BofA are able to prudently grow their loan portfolios over time and thrive in lockstep with the U.S. economy.

Berkshire's now-retired investing legend was likely also a fan of Bank of America's interest rate sensitivity. Compared to America's other money-center banks, none is more sensitive to interest rate shifts. When the Federal Reserve undertook an aggressive rate-hiking cycle to curb inflation from March 2022 to July 2023, it resulted in a sizable increase in BofA's net interest income.

Despite these positives, Buffett oversaw the sale of 464,781,994 shares of Bank of America -- approximately 45% of the position -- from July 17, 2024, to Sept. 30, 2025.

Profit-taking is one plausible explanation for this selling activity. With President Trump lowering the peak marginal corporate income tax rate, locking in profits became advantageous. With the exception of Apple, BofA accounted for a significant portion of Berkshire's unrealized investment gains.

But there may be more to this story than just Buffett's desire to lock in gains. Bank of America's valuation most likely came into play.

The one unwritten investing rule that the Oracle of Omaha never broke or bent was his desire to get a good deal. Value seemed to be the most important aspect of Buffett's investment approach. When Berkshire's billionaire boss initially purchased preferred stock in BofA in August 2011, the company's common shares traded at a 68% discount to book value. As of this writing on Jan. 28, Bank of America stock commands a 35% premium to book. While this isn't outrageously pricey, it's no longer the bargain it once was.

Warren Buffett may have also been anticipating a rate-easing cycle from the central bank. Given that BofA is the most interest-sensitive among America's big banks, a rate-cutting cycle can hurt its interest income generation more than its peers.

Image source: Getty Images.

Berkshire's now-retired boss wanted his piece of the pie

Although Buffett was a net seller of stocks for 12 consecutive quarters, as of the end of September, he did find a select few stocks worth buying in the lead-up to his retirement. Perhaps no company was viewed more fondly during the Oracle of Omaha's proverbial farewell tour than beloved consumer brand, Domino's Pizza (NASDAQ: DPZ).

While Berkshire's 13F detailing trading activity for the fourth quarter isn't expected to be filed until Feb. 14, prior 13Fs show that the now-retired Buffett was a buyer of Domino's Pizza stock for five consecutive quarters:

• Q3 2024: 1,277,256 shares purchased
• Q4 2024: 1,104,744 shares purchased
• Q1 2025: 238,613 shares purchased
• Q2 2025: 13,255 shares purchased
• Q3 2025: 348,077 shares purchased (2,981,945 total shares held)

The nearly 3 million shares Buffett scooped up in the quarters leading to his retirement account for 8.8% of Domino's outstanding shares.

Since its initial public offering in July 2004, Domino's Pizza stock has rallied almost 6,700%, including dividends. Three catalysts have driven this outsize return.

To begin with, Domino's Pizza has earned the trust of its customers. In 2009, management made the tough decision to undertake a mea culpa marketing campaign that bluntly admitted its pizza was not up to par. While blunt transparency doesn't always work, being upfront and honest has endeared customers to the brand. Warren Buffett never underestimated the intangible value of customer loyalty.

Secondly, Domino's Pizza met or exceeded its five-year strategic growth initiatives. Instead of looking a year into the future, Domino's management team has set lofty targets that are several years away. The newest five-year plan, dubbed "Hungry for MORE," emphasizes the use of technology and artificial intelligence to boost output and improve supply chain efficiency. It also empowers its team members to bolster the value of the Domino's brand and revamps the company's marketing campaign.

The third factor that likely encouraged the Oracle of Omaha to buy Domino's stock for five straight quarters prior to his retirement is its international runway. Through 2024, Domino's had grown its international same-store sales for 31 consecutive years. The company's value proposition and products are clearly resonating worldwide.

Bank of America is an advertising partner of Motley Fool Money. Sean Williams has positions in Bank of America. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Domino's Pizza. The Motley Fool has a disclosure policy.