Buffett Remains Bullish On Oil, Adds to Chevron, Occidental Stakes

Warren Buffett remains bullish on oil prices and the energy industry, adding to Berkshire Hathaway’s stakes of oil major Chevron  (CVX)  and Occidental Petroleum  (OXY)  during the second quarter.

The Oracle of Omaha’s conglomerate Berkshire Hathaway  (BRK.A)  also increased its stakes in Apple  (AAPL)  and Activision Blizzard  (ATVI)  during the second quarter, according to a U.S. Securities and Exchange Commission filing on Aug. 15.

During the second quarter Berkshire Hathaway spent $6 billion on stocks, compared to the $51 billion it allocated for stocks during the first quarter. 

The conglomerate purchased four million more shares of Apple, which remains its largest holding. It owns a total of 894.8 million shares. 

Berkshire Hathaway bulked up its holding of Chevron by adding 2.4 million more shares, bringing the total to 161.4 million shares and also purchased 22 million more shares of Occidental Petroleum. It owned 158.5 million shares as of June 30. Berkshire Hathaway purchased more shares of Occidental and holds 188 million shares, a 20% stake in the energy company.

The company purchased another four million shares of Activision Blizzard and now owns 68.3 million shares. 

Buffett said the company continued to add to its stake in the video game company because it serves as an arbitrage play, the CEO told shareholders at Berkshire Hathaway’s annual April meeting. Activision is set to be acquired by Microsoft  (MSFT)  for $95 a share.

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The company lowered its holding in General Motors  (GM) by nine million shares and now owns 52.9 million shares and also divested its remaining small stake in Verizon Communications  (VZ)  of only 1.4 million shares as of March 31, a decline from 160 million shares at the end of 2021.

Berkshire Hathaway sold five million shares of Kroger  (KR) , a grocery store chain and now holds 52.4 million shares.

The conglomerate also boosted its holding of Paramount Global  (PARA)  by purchasing nine million shares to own a total of 78.4 million and also upped its stake in Ally Financial  (ALLY)  by purchasing by 20 million shares to hold 28.7 million shares.

Buffett’s conglomerate sold six million shares of U.S. Bancorp to a total of 119.8 million shares and lowered its its position in Store Capital  (STOR) by eight million shares to hold 6.9 million shares.

Berkshire Hathaway suffered investment losses during the market volatility, but the operating profits of its multitude of businesses such as energy, insurance and utilities skyrocketed. The conglomerate’s operating earnings increased to $9.283 billion during the second quarter of 2022, a rise of 38.8% from a year ago.

The businesses were not immune to the constant turmoil in the market and fell by $53 billion during the quarter, Berkshire reported August 6.

But Buffett, a well-known and highly regarded investor, cautioned against focusing on just the short-term fluctuations on its investments.

“The amount of investment gains/losses in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules,” Berkshire said in a statement.

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