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Warren Buffett put down money to collect oil and gas stocks, sell off bank stocks

According to a filing with the Securities and Exchange Commission on May 4, Berkshire Hathaway bought about 5.9 million more shares of Occidental Petroleum Corp., as billionaire Warren Buffett’s company is placing a bigger bet on Occidental Petroleum Corp. oil giant.

These shares were purchased by Berkshire on May 2 and May 3 with prices ranging from $56 to $58.37 per share. Before that, Berkshire held about 14.6% of Occidental’s common stock, in addition to the preferred shares it bought in 2019 when the company was working on a deal to acquire Anadarko Petroleum Corp.

Occidental was the best performer in the S&P 500 for the first quarter of 2022. This business has benefited from Warren Buffett’s group’s strong stock accumulation and high oil prices due to the conflict in Ukraine. Occidental shares rose 3.9% on May 4 in New York, to $61.75 and more than doubled year-to-date.

For decades, Berkshire Chairman and CEO Warren Buffett has maintained a cautious approach to investing. He has always appreciated banking and retail stocks, while not betting big on volatile sectors like technology and energy. In fact, the big banks in the US are Buffett’s favorite investment because the sector is part of America’s infrastructure – a country he has always trusted to pour money into.

Most recently at the end of 2019, Berkshire held large stakes in 4 of the 5 largest banks in the US. Wells Fargo remained the largest share in the group’s portfolio for the third year in a row through 2017. However, it seems that Buffett has changed his investment stance over the past few years, he has stepped up the investment. invest in energy and technology corporations while reducing the proportion in the banking sector.

After the pandemic broke out in early 2020, Buffett sold off his stakes in Wells Fargo, JPMorgan and Goldman Sachs at a low price, although many stocks in this sector are gradually falling. He shared at a shareholder meeting last year: “In general, I like to invest in banks. I’m just not satisfied with the proportion of this sector in the portfolio compared to the possible risks. if there are bad business results.”

Many analysts also share their views on Buffett selling off bank stocks.

“This means that Buffett thinks we need to minimize the ‘holes’ when looking at a long and likely inflation cycle,” said Phillip Phan, a professor at Johns Hopkins Carey Business School. maybe even a recession Bank stocks are cyclical and all signs point to us being in a period of high inflation, high interest rates for a while, so borrowing activity will came under pressure and investment fell.”

While the Fed raised interest rates this year, a move that usually boosts banks, the industry has been affected: for example, WFC stock is down 14% year-to-date, JPMorgan is down 26.2% due to worries. fear that the US economy may fall into recession when the central bank tightens policy “too much”.

As for Buffett’s energy investments, he has bet big on this while reducing his holdings in banks, despite the high price of oil and gas shares at the start of the year. In March, Berkshire purchased 118.3 million shares of Occidental in multiple transactions between March 12 and March 16. In addition, the billionaire’s conglomerate also bought about 9.4 million shares of Chevron in the fourth quarter, bringing Berkshire’s total holdings to 38 million shares now worth $6.2 billion.

Refer to Bloomberg, Yahoo Finance

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