How Warren Buffett's Investing Philosophy Shifted: The Bank of America Exit and Domino's Pizza Bet

Warren Buffett’s legacy as one of history’s greatest investors spans roughly six decades, during which his stewardship of Berkshire Hathaway delivered a staggering cumulative return of nearly 6,100,000% in Class A shares—nearly doubling the annualized performance of the S&P 500 since the mid-1960s. Yet as the legendary investor transitioned out of the CEO role at the end of 2025, handing leadership to Greg Abel, his final years at the helm revealed a striking shift in investing priorities that offers valuable lessons for market participants.

Through Securities and Exchange Commission Form 13F filings—mandatory quarterly disclosures that reveal the stock positions of institutional investors managing $100 million or more—we can see exactly how Buffett was positioning Berkshire Hathaway during his farewell period. These documents tell a fascinating story: a strategic retreat from a decades-long core holding paired with an aggressive accumulation of a beloved consumer brand.

The Strategic Exit: Why Buffett’s Investing Thesis on Bank of America Changed

For most of the past decade, Bank of America occupied a top-three position in Berkshire Hathaway’s portfolio, representing a relationship dating back to August 2011 when Berkshire purchased preferred stock in the institution. The investing rationale was sound. Financial sector stocks have long been Buffett’s preferred domain, offering natural advantages through economic cycles—since expansions vastly outpace recessions, banks can methodically expand loan portfolios while benefiting from sustained economic growth.

Bank of America, in particular, possessed traits the investing guru valued: exceptional sensitivity to interest rate movements. When the Federal Reserve pursued aggressive rate hikes from March 2022 through July 2023 to combat inflation, BofA’s net interest income—the spread between what it earns on loans and pays on deposits—surged dramatically. This made the position an elegant play on Fed policy and economic growth.

Yet despite these structural advantages, Buffett orchestrated the divestment of 464,781,994 shares—roughly 45% of Berkshire’s position—between July 17, 2024, and September 30, 2025. Profit-taking clearly played a role. With the Trump administration lowering corporate tax rates, locking in gains became strategically advantageous, particularly as Bank of America (alongside Apple) represented a substantial portion of Berkshire’s unrealized gains.

However, the investing decision reflected deeper considerations. When Buffett initially constructed this position in 2011, Bank of America traded at a 68% discount to book value—an exceptional margin of safety. By early 2026, the stock commanded a 35% premium to book value. While not egregiously overpriced, the margin of safety had evaporated. For an investor whose cardinal rule emphasized purchasing at a discount to intrinsic value, the valuation had simply become less compelling.

Moreover, Buffett likely anticipated the Federal Reserve would eventually pivot toward rate cuts. For a bank as interest-rate sensitive as Bank of America, a declining-rate environment poses greater challenges than its peers would face, potentially compressing net interest margins significantly. This forward-looking perspective—a hallmark of sophisticated investing—may have tipped the scales toward exiting.

Building Conviction: Buffett’s Consecutive Investing Opportunity in Domino’s Pizza

While Berkshire Hathaway was a net seller of stocks for 12 consecutive quarters heading into Buffett’s retirement, he identified select opportunities worthy of commitment. None captivated his attention quite like Domino’s Pizza, which emerged as the sole stock he accumulated consistently across five quarters leading up to his departure.

The purchasing pattern reveals conviction:

• Q3 2024: 1,277,256 shares acquired
• Q4 2024: 1,104,744 shares acquired
• Q1 2025: 238,613 shares acquired
• Q2 2025: 13,255 shares acquired
• Q3 2025: 348,077 shares acquired

These purchases totaled approximately 2,981,945 shares, representing an 8.8% stake in Domino’s outstanding equity. Since its July 2004 IPO, Domino’s stock has returned roughly 6,700% including dividends—a performance that demands explanation.

Three factors animated Buffett’s investing interest. First, Domino’s has cultivated extraordinary customer loyalty through transparency and authenticity. In 2009, facing criticism over product quality, management executed a remarkable marketing campaign that candidly acknowledged the shortcomings and committed to improvement. This honesty resonated with consumers, building a brand affinity that competitors struggle to match. Buffett understood intuitively what research confirms: customer loyalty represents an intangible yet powerful competitive moat.

Second, the company has demonstrated disciplined execution of multi-year strategic initiatives. Rather than managing quarter-to-quarter, Domino’s leadership sets ambitious five-year targets. The current initiative, “Hungry for MORE,” emphasizes technology deployment and artificial intelligence integration to boost production velocity and streamline supply chain operations, while empowering employees and refreshing marketing approaches. This forward-thinking investing in capabilities aligned with Buffett’s own operational philosophy.

Third, Domino’s possesses remarkable international expansion potential. The company achieved 31 consecutive years of international same-store sales growth through 2024, demonstrating that its business model transcends geography. For an investing mentor seeking exposure to secular growth beyond U.S. borders, this runway offered compelling long-term value creation prospects.

What Buffett’s Final Moves Reveal About Disciplined Investing

The arc of these transactions—trimming a mature financial position while building a position in a consumer franchise with international optionality—encapsulates timeless investing principles. Sell when valuations have stretched beyond margin of safety, even if the business remains sound. Allocate capital toward compounders with durable competitive advantages and secular tailwinds. Prioritize management quality and strategic clarity. Demand customer loyalty as evidence of pricing power.

These moves underscore that successful investing transcends market cycles or economic headlines. It demands the discipline to exit positions that no longer meet your valuation criteria, combined with the conviction to accumulate stakes in businesses where competitive moats and management excellence can compound value across decades. As Buffett transitions from daily decision-making, his final investing actions offer investors a masterclass in capital allocation discipline.