Warren Buffett sold all Bank of America shares held in Berkshire Hathaway's portfolio in late 2010, after watching the stock lose more than 66% of its value over the past 3-1/2 years - dropping from $48 to $15 a share.  Berkshire purchased 8.7 million BofA shares in mid-2007, when CEO Ken Lewis was actively acquiring companies and predicting the U.S. housing slump would be over within months. 

Conversely, Berkshire added to its large stake in Wells Fargo & Co. 

Berkshire also eliminated stakes in Nike, Comcast, Nalco Holding Co., Fiserv, Lowe’s, Becton, Dickinson. quarter. In November, Berkshire disclosed that it sold holdings in Home Depot, trash hauler Republic Services, and Iron Mountain.  Buffett’s U.S. portfolio had 25 stocks and a value of about $52.6 billion at the end of December.

    BofA's Faulty Mortgages.   BofA CEO Brian Moynihan, who replaced Lewis early last year, is facing increased regulation and lawsuits from investors who said the company sold faulty mortgages.  Under Moynihan, the bank recorded a $2.2bn net loss in 2010, as shares dropped 11% - the worst performance among the 10 biggest U.S. banks.  Buffett told CNBC in 2009 that while Bank of America excelled at gathering deposits, "they’ve got some activities that are maybe less wonderful."

Commenting on Ken Lewis's decision to purchase Merrill Lynch & Co. - in lieu of buying Lehman Brothers Holdings Inc., which collapsed immediately thereafter, Buffett said Lewis "paid a crazy price, in my view.  He could have bought them the next day for nothing because Merrill was going to go when Lehman went."   [NYTimes, 2/15]