The famous Oracle of Omaha made a dramatic turn in the first quarter of this year. After about two years of lamentation over the lack of suitable investment opportunities and warnings about excessive company valuations, Warren Buffett has finally set out to shop. And he bought more than $ 50 billion in stock.
His holding Berkshire Hathaway has significantly increased its stake in energy giant Chevron and has also invested in gaming company Activision Blizzard and computer maker HP. That’s according to data released Saturday at Buffett’s meeting with Berkshire Hathaway shareholders, which took place live for the first time since 2019.
During the first three months of this year, his holding spent a total of $ 51.5 billion on new shares, while disposing of less than $ 10 billion in shares. According to the agency, the net quarterly increase in new shares of $ 41 billion in its portfolio is Bloomberg highest since 2008.
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This was mainly due to a significant increase in the bet on the oil company Chevron. While Berkshire held a $ 4.5 billion stake in it last year, it was $ 25.9 billion by the end of March. Chevron is now the fourth most valuable item in Buffett’s portfolio. Chevron shares have strengthened by about 30 percent this year, mainly due to higher oil prices, which rose after the Russian invasion of Ukraine.
However, Chevron is not Warren Buffett’s only energy bet in recent months. In early March, Berkshire unveiled a 14.6 percent stake in petrochemical company Occidental Petroleum, which is now worth over $ 7 billion. “Together, Berkshire already has more than $ 40 billion in oil business,” he told the station CNBC analyst James Shanahan of the consulting firm Edward Jones.
Warren Buffett also announced on Saturday that Berkshire holds 9.5 percent of the gaming company Activision Blizzard, making it the largest shareholder. Microsoft currently buys this video game publisher for nearly $ 70 billion, the largest takeover in the industry. Microsoft is offering $ 95 a share for Activision Blizzard, and Buffett’s holding bought 15 million at the end of last year, when they sold significantly cheaper.
Berkshire Hathaway’s significant purchases in recent months include the acquisition of US insurance company Alleghany for $ 11.6 billion or the acquisition of a $ 4.2 billion stake in computer and printer manufacturer HP.
According to analysts and investors contacted by the newspaper Financial Times Buffett took advantage of the ” discounts’, when the price of many stocks fell, for example because of the war in Ukraine or the slowdown in Chinese economic growth. At the same time, he reassured them with his continued confidence in the US stock market.
However, during a meeting with Berkshire Hathaway shareholders on Saturday, Buffett again criticized his favorite goals – investment banks and brokerage firms. Wall Street, for example, accused of turning stock exchanges into a casino. “Wall Street doesn’t make money until people start doing something, then it takes a share of it. And he earns much more when people gamble with money than when they invest, “said the 91-year-old investor.
According to him, large American companies have become “poker chips” for speculation, referring to the mass of small amateur investors who have flooded the markets in the last two years. These traders made extensive use of stock option instruments, ie opportunities to sell / buy shares at a predetermined price in the future, on which, according to Buffett, trade intermediaries earn more than on regular purchases and sales.
“It’s almost a speculative mania.” We have people here who know nothing about stocks and are advised by brokers who know even less. A crazy situation, “added Buffett’s longtime business partner Charlie Munger, who had a Saturday meeting by his side.
In the first quarter of this year, however, Berkshire Hathaway’s net profit fell more than half year-over-year to $ 5.46 billion, also due to a loss of $ 1.6 billion in the investment portfolio. However, Buffett called similar fluctuations “insignificant” because U.S. accounting standards require changes in the value of investments to be made in quarterly results. And Buffet plays a longer game.
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