Invite ye felawes and frendes desirous in gold to enter the gates of Shrewd'm, for they will thanke ye later.
- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 3
FreightWaves recently had an article on the impact of rising diesel prices on the US transport sector, especially trucking and rail. An interesting side question is how the industry will pass these additional costs onto customers. Apparently, they don't all do it the same way.
https://www.freightwaves.com/news/rapid-fuel-price...Fortunately, BNSF is rolling out a new mileage-based fuel surcharge program this year.
https://www.progressiverailroading.com/railPrime/d...Note: I'm pretty sure fuel savings helped BNSF's YOY performance in 2025. Will be interesting to see how they handle this.
abromber
No. of Recommendations: 0
Maybe Oxy will send BNSF some of that oil at wholesale prices. Synergies, baby!
🙄
No. of Recommendations: 3
Maybe Oxy will send BNSF some of that oil at wholesale prices. Synergies, baby!
I doubt that. But there is sort of an indirect/implicit hedging, with Occidental making extra profits at least for a while. OXY stock up from $41 to $58 this year, though that's probably not very important to the folks in Omaha.
Jim
No. of Recommendations: 1
Any thoughts on Occidental Petroleum? I have a small, but leveraged position (6%) and recent higher prices would provide a decent exit point. Better to roll it into BRK? Continue as a hedge against higher gas prices due to Iran?
No. of Recommendations: 2
“OXY stock up from $41 to $58 this year, though that's probably not very important to the folks in Omaha.”
Wondering what you mean here?
What do you think was the Buffett and Munger thesis with the Oxy investments?
Debt reduction; lower exploration risk; engineering capability; low breakeven costs at $40 oil; domestic security creating demand; carbon capture. Or maybe just the 8% preferred plus calls at $59.63. Plus the 10% early redemption fee. Last point seems to fit well enough with Berkshire’s 9% hurdle.
Or was there an attraction to the really long term inflation hedge of owning oil in a world with increasing inflationary policies?
I suppose the buying of the equity below $60 per share suggests he is happy to own longer term now the debt is melting.
Is he likely thinking about the valuation and FCF or is he more interested in a hedge, or both?
No. of Recommendations: 13
“OXY stock up from $41 to $58 this year, though that's probably not very important to the folks in Omaha.”
...
Wondering what you mean here?
Nothing fancy. Just that I expect that management expects this to be a very long term position, so changes to business prospects are important but shorter term price moves aren't.
It matters that their cash flow will be a lot better next quarter than it otherwise would have been (and perhaps longer, who knows), but as they almost certainly aren't going to be sellers, the share price change year to date is just noise.
Jim
