Buffett's Coca Cola Wells 50% full (NYSE: KO) (NYSE: WFC)

NEW YORK - Warren Buffett the legendary investor and CEO of Berkshire Hathaway announced in his regulatory filing today that he has sold all of his: Bank of America, Lowes, Becton Dickinson, Comcast, Lowes and Nalco Holdings. The entire portfolio is now down to 25 stocks with Coca Cola and Wells Fargo making up approximately 50%. Other notable stocks in the portfolio include U.S. Bancorp, American Express and Kraft which all together make up close to 70% of Buffett's stock portfolio.

Most of the sales of Berkshire stock are attributed to the retiring of Lou Simpson, who led Geico for thirty 30 years. The money will likely be given to Todd Combs the new employee of Berkshire and former hedge fund manager who will handle $3 billion in investments.

The sale of Bank of America stock seemed to be separate from the Lou Simpson portfolio. Buffett never liked BAC stock and has been selling it during the recession. Buffett last sold BAC in October 2008 when it traded around $15. Perhaps $15 is the threshold around what he believes BAC is worth.

Buffett says when it comes to banks, that " because leverage of 20:1 magnifies the effects of managerial strengths and weaknesses, we have no interest in purchasing shares of a poorly-managed bank at a 'cheap price.' Instead, our only interest is in buying into well-managed banks at fair prices"

It could be interpreted that Buffett is saying that while BAC is undervalued he would rather be buying Wells Fargo which is fairly valued. This is of course would be a paradox, since if a bank is fairly valued and another one is cheap, the cheaper one would outperform it. What Buffett is actually saying is that stocks like Citigroup and BAC which trade around book are not as cheap as one might think. And that the old metrics that his mentor Benjamin Graham taught him in finding cheap stocks are not always applicable.