Warren Buffett expands investments in oil

Denver Star investor Warren Buffett has expanded his bet on rising oil prices. He increased his stake in the energy company Chevron by more than 30 percent in the fourth quarter of 2021, according to mandatory disclosures to the US Securities and Exchange Commission.

This makes Chevron the ninth-largest position in Buffett’s portfolio. Buffett joined Chevron in late 2020 and now owns $4.5 billion in stock. The paper is considered a classic value stock and is a bet that the economy will recover quickly after the pandemic. With that, the 91-year-old CEO of conglomerate Berkshire Hathaway had a good intuition. Chevron grew 39 percent last year and is up 16 percent this year. In view of the crisis in Ukraine, oil prices had recently risen significantly. Chevron also pays a dividend of 4.2 percent.

Berkshire also bought 14.7 million shares of Activision Blizzard before Microsoft made a takeover bid for the troubled video game maker in January. That’s unusual for the company, which has long steered clear of tech stocks. Observers therefore assume that one of Buffett’s portfolio managers, Ted Weschler and Todd Combs, is behind the decision. Buffett co-manages the Berkshire portfolio with Weschler and Combs, giving them a free hand in their decisions.

The Microsoft takeover gave Activision shares a plus of a good 20 percent. Microsoft founder Bill Gates was a long-time Berkshire Hathaway board member, but announced his retirement in March 2020.

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Berkshire divested itself of its stake in the pharmaceutical company Teva and reduced its stake in Abbvie by 79 percent and in Bristol-Myers Squibb by 76 percent.

The rest of its top 10 holdings, however, were flat in the fourth quarter. At the top is Berkshire’s $157.5 billion stake in iPhone maker Apple, followed by Bank of America, American Express and Coca-Cola.
Berkshire-Hathaway stock is on the up this year.

The group is well positioned for rising inflation rates. Berkshire stock is up nearly 4% this year, significantly more than the broad S&P 500, which Buffett likes to compare himself to. It has been down a good eight percent since the beginning of the year.

More: Star investor Mike Burry once foresaw the financial crisis, even before the current correction he reduced his portfolio. Here are his changes in the depot.

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