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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 0
Share price has been quite weak. Aside from Apple, Buffett’s stock picking has not been that great this century.
No. of Recommendations: 4
“ Aside from Apple”
Apple covers many misses to say the least
No. of Recommendations: 6
I bought some today. I read an excellent write up on VIC, that along with currently at 52 week lows, attractive valuation and massive free cashflow. Can't see the oil price weakening substantially further, more likely will be maintained or higher going forward meaning they'll be coining it with a such a low break even point.
No. of Recommendations: 2
BAC and BYD says otherwise
No. of Recommendations: 0
Aside from Petrochina, his record in oil is not great. Lost a ton on COP.
No. of Recommendations: 4
The other thing that caught my eye was Li Lu $92m purchase at $63 so I thought a 20%+ discount to this is not bad either. Adds more diversification and a new sector to my portfolio too and switching some funds back out of China to the US given recent run up.
No. of Recommendations: 5
No. of Recommendations: 13
I've never been a fan of the OXY accumulation. Oil stocks follow the oil price. No one knows where that is headed, and if you do, the commodities markets would be the place to make money. I learned that from WEB.
That said, OXY is sitting on very significant reserves. The Permian Basin is one of the planet's greatest petroleum systems. It is one of those places where recoverable reserves just keep growing with improved technology Current stock prices will go up and down, but the reserves and the resultant cash flow will be steady and significant long term. In OXY we have the huge value of oil in the ground, in a company which has reduced long term debt from something like 45 billion in 2019 to 18 billion currently. The stock price may tell us in hindsight we could have accumulated this value more efficiently but the long term business plan is probably pretty sound.
No. of Recommendations: 1
This is going to be one of those cannibal stocks I've determined through share buybacks. I think that's why WEB likes it.
No. of Recommendations: 1
Pretty surprised Warren isn’t building more OXY ownership here, esp. around $50. Maybe he’s content with our current ownership of 27.3% plus the warrants.
No. of Recommendations: 7
Good post! I'm curious why WEB is now sitting on his hands with respect to buying more OXY. If he liked it at $59, he must love it at $50, no? But he is not adding to the position. Does anyone find that to be just a bit unusual?
Then again Warren has an interesting history with energy stocks. Over the years that I have owned BRK he has had a position in XOM, COP, PSX, CVX and now OXY. He sold XOM almost as fast as he bought it, took a significant write-down in COP, built up a 14% position in PSX only to sell the entire position WAY TOO EARLY, seems to sell bits and pieces of CVX every quarter and now is no longer adding to OXY.
No. of Recommendations: 11
"Then again Warren has an interesting history with energy stocks. Over the years that I have owned BRK he has had a position in XOM, COP, PSX, CVX and now OXY. He sold XOM almost as fast as he bought it, took a significant write-down in COP, built up a 14% position in PSX only to sell the entire position WAY TOO EARLY, seems to sell bits and pieces of CVX every quarter and now is no longer adding to OXY."
You forgot PetroChina, which was approximately a 10 bagger. ;-)
No. of Recommendations: 1
Thanks for catching that. Just a small omission on my part LOL.
No. of Recommendations: 4
Over the years that I have owned BRK he has had a position in XOM, COP, PSX, CVX and now OXY. He sold XOM almost as fast as he bought it, took a significant write-down in COP, built up a 14% position in PSX only to sell the entire position WAY TOO EARLY, seems to sell bits and pieces of CVX every quarter and now is no longer adding to OXY."
You forgot PetroChina, which was approximately a 10 bagger. ;-)
Another that was not in the above list is Occidental. Not the recent underwater purchases that began in 2022, but earlier. Berkshire bought about 19m shares in Q3 and Q4 of 2019, at prices about $40, and then turned around and sold them all in 2020 Q2 when COVID hit, for less than half that. OK, what's a $400m loss for a company Berkshire's size, but still, when you look at the chart, it's hard to imagine a worse time to sell oil stocks.
dtb
No. of Recommendations: 6
When I read/research Buffet's investments/trades, one things always comes to mind - a couple 10 baggers sure can make up for a lot of 50% losers...
With some modest amount of diversification, if you can find and have the patience to ride the 10x investments up, you sure can recover from a lot of other losses.
The math is simple... Finding and having the conviction to hang onto what become 10x (or much more) winners is not easy for many of us.
Lee
No. of Recommendations: 9
Then again Warren has an interesting history with energy stocks.
When OXY was having to pay the preferred shares dividends with stock dividends for lack of cash, he also sold them as soon as he received them. Then he started buying again when the vaccines slowed the pandemic and bailed OXY out of serious trouble. The invasion of the Ukraine provided an unexpected - but welcome - bonus. OXY could easily have gone into bankruptcy had the demand downturn persisted.
WEB talks about buying a business, not a stock. But he's never seemed to treat O&G stocks that way.
The horse he's chosen to ride - at least for now - is one of the weakest significant producers from a balance sheet viewpoint. The good news is that it's got the most room for improvement - and maybe a price rebound when it happens. And I agree that OXY reserves provide downside protection. Someone will want them.
I join the crowd. I don't understand Buffett's reasoning and actions with O&G.
No. of Recommendations: 3
Investing is not for you if you are always uncomfortable betting against Buffett, if you need to hinge on his every word and action religiously. That would mean you are not capable of independent thinking on your own. Buffett is extremely good for what he has to manage, but he is also limited.
For example - The simple reason that I am bullish on Apple is its ecosystem. I don't agree with Buffett on footing a hefty tax bill to get out of Apple at this time (except that I would not know if he had other motivations). I am keen on BYD long term and also some other Chinese stocks at this price (even after such a big move last week). I didn't like OXY but got into Marathon Oil instead, but soon bailed on that position with a small profit. It was just not appealing in comparison to my other alternatives - in terms of pricing and my ability to visualize its future in my own way.
OXY might as well turns out to be a winning trade for Buffett and I don't really care one way or another. I much prefer to go my own obscure direction to look for my own pot of gold.
No. of Recommendations: 1
If China gets into an recession (probably already is), and at the same time starts a war against Taiwan, what will happen to oil stocks?
No. of Recommendations: 1
If China gets into an recession (probably already is), and at the same time starts a war against Taiwan, what will happen to oil stocks?
If you suggest OXY could be a hedge to some situations that scare Buffett, it is too tiny a position for a company of Berkshire's size. And a basket of oil companies or oil future would be much better, and maybe add some companies in the defense industry for better effect. What a mess!
No. of Recommendations: 0
“This is going to be one of those cannibal stocks I've determined through share buybacks. I think that's why WEB likes it.”
Arab are wasting so much money doing stupid investments (AI, Esports) etc, they will need to sell oils at even lower prices to balance their budget
No. of Recommendations: 1
VIC is good , but I backtested it. None of its ideas have prediction power if it’s posted more than 90 days ago (slight prediction between 45-90 days)
No. of Recommendations: 7
“For example - The simple reason that I am bullish on Apple is its ecosystem. I don't agree with Buffett on footing a hefty tax bill to get out of Apple at this time (except that I would not know if he had other motivations). I am keen on BYD long term and also some other Chinese stocks at this price (even after such a big move last week).”
I think there’s a reason why US companies decided to invest billions to move suppliers out of China, and US govt is giving intels billions to build chip plants. These guys are spending real money. Imo, they have concrete information to make them spend such money.
Buffett is correct selling out of BYD and TSM, and Apple. The geopolitical will get a lot worse after election. I didn’t believe China will invade Taiwan, but increasingly I believe this will happen . In fact, China has claimed this will happen by 2027.
No. of Recommendations: 3
I think there’s a reason why US companies decided to invest billions to move suppliers out of China, and US govt is giving intels billions to build chip plants. These guys are spending real money. Imo, they have concrete information to make them spend such money.
Buffett is correct selling out of BYD and TSM, and Apple. The geopolitical will get a lot worse after election. I didn’t believe China will invade Taiwan, but increasingly I believe this will happen . In fact, China has claimed this will happen by 2027.
I am glad someone voiced a completely opposite view (truly appreciate).
Nowhere is safe (at least during that period) if it unfolds as you foresee. Will BYD, TSM, and Apple be largely destroyed and other Berkshire's investments spared if and when it happens (with more than a year of lead time to the flashing red light)? Is it wise to pay such a hefty cost just in case it happens? And if it doesn't? But how about selling the rest of the holding in Apple? How about loading up on stocks in key commodities and in defense industry?
It is always tricky to predict future events and market conditions. It is trickier to position investments accordingly to something that might or might not materialize, unless you can read into every decision makers' minds.
No. of Recommendations: 6
No. of Recommendations: 1
“ Currently being on Crete I discovered something not only our member sleepydragon might find funny”
🤣
Maybe they will be interested in buying my Gmail address
No. of Recommendations: 0
Thoughts on IV? mine is c$85-90 per hare with an oil price of $75pb
No. of Recommendations: 0
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