From
Livewire MarketsWarren Buffett doubles down on his big money energy bet
Big oil, big money
If you've ever seen the showWheel of Fortune, chances are you've heard the phrase "big money!" shouted a few times. In Warren Buffett's case, he believes the big money will be made in big oil. How do we know this?
In 2019, Buffett initially invested $10 billion in oil and gas explorer Occidental Petroleum (OXY: NYSE). The most recent 13F filing shows that he added an extra 14 million shares to his arsenal last quarter - at a cost of nearly $800 million.
The move is so large that Berkshire Hathaway now owns about 17% of Occidental's outstanding share register - more than fellow whale investors Vanguard and Blackrock. The moves have also - naturally - fuelled speculation of an eventual buyout. Not least because reporting from Bloomberg suggests Berkshire is proposing to buy out as much as 50% of the company!
But this is the part that will really vindicate Buffett, Berkshire Hathaway, and their loyal followers. Since those large purchases were made, the share price of Occidental continues to climb. Whether it's a Buffett effect or not is one matter, but I suspect they would be willing to argue that the long-term thesis is intact:
(Source: CNN Money) - The green dots show when Buffett made his initial purchases. The green on the bottom is the share price performance seen ever since.
Berkshire Hathaway also increased its stake in Chevron (NYSE: C) - just to hammer home the point that old-world energy continues to remain an attractive investment idea.
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