Warren Buffett’s $5.4 BILLION Warning to investors

Scott,
 
Why haven’t you written about your idol Warren Buffett selling BILLIONS of dollars worth of his Bank of America shares? Sounds like he knows something we don’t …
 
Chris
 
Hi Chris,
 
So I’m guessing you picked this up from that prestigious financial news digest Daily Mail – which ran this typical Daily Mail headline this week:
 
“Warren Buffett’s $5.4 BILLION warning to investors after he dumps popular stock – and Wall Street better pay attention”
 
“Oh my god”, I thought to myself.
 
Then I spat out my coffee and violently jerked my mouse towards the headline on the screen.
 
DOUBLE-CLICK!
 
However, as I read the actual article, I started frowning. Shockingly, it didn’t live up to the headline.
 
(Does it ever?)
 
Yes, it’s true that Buffett has sold $5.4 billion in Bank of America shares (well, the actual figure is $7 billion, but … close enough).
 
So, is he sending investors a warning?
 
No.
 
How can I be so sure?
 
Well, firstly, because the 94-year-old has said publicly thousands of times over his career:
 
“I have never made any investment decision based on an economic prediction.”
 
So there’s that.

Yet what was missing from the headline was context:
 
His Bank of America sale represents … just 0.7% of Berkshire’s overall assets.
 
(And he still owns a whopping 882 million Bank of America shares, worth US$33.7 billion.) A more likely explanation is that he was taking a profit, given the stock is up 70% since October.
 
Anyway, just for kicks, I decided to get my Daily Mail on and ask ChatGPT to come up with a clickbaity headline on Buffett that investors could actually use.
 
Here’s what it came up with:
 
“Shocking Move: Warren Buffett Bets His Entire Fortune on Just ONE Stock”
 
It’s true.
 
For context, in his will, the 94-year-old billionaire is investing his inheritance into one low-cost index fund.
 
The reason is that Buffett argues that index funds are the best investment for everyone and advises that we should be buying them consistently throughout our lives, saying:
 
“The temptation when you see bad headlines in newspapers is to say, well, maybe I should skip a year or something. Just keep buying.”

Scott.