In recent months, Warren Buffett, the renowned CEO of Berkshire Hathaway (NYSE: BRK.A and BRK.B), has attracted significant attention due to his striking stock market activities. While long hailed as one of the top investors of our time, Buffett has recently adopted a cautious approach by selling a staggering $132 billion worth of shares since October 2022. In an environment increasingly marked by economic uncertainty, his selective investment strategy has caught the eye of both new and seasoned investors.
Historically, Buffett has consistently outperformed major stock indices, earning him the nickname “Oracle of Omaha.” Under his leadership, Berkshire Hathaway has recorded returns nearly double that of the S&P 500, leading to its remarkable trillion-dollar valuation—a milestone reached by only a handful of U.S. companies.
Despite his impressive track record, recent filings reveal a shift in Buffett’s investment behavior. For the past seven quarters, he has been net selling stocks, which has raised eyebrows in the investment community. Here’s a breakdown of his net equity sales:
- Q4 2022: $14.64 billion
- Q1 2023: $10.41 billion
- Q2 2023: $7.98 billion
- Q3 2023: $5.25 billion
- Q4 2023: $0.53 billion
- Q1 2024: $17.28 billion
- Q2 2024: $75.54 billion
Amid this selling spree, two stocks continue to pique his interest: Occidental Petroleum (NYSE: OXY) and his own company, Berkshire Hathaway.
Occidental Petroleum has been a consistent buy for Buffett since early 2022. This energy giant’s share price is expected to remain strong, as a constrained supply drives prices up, making it a strategic investment in the oil and gas sector. With an increasing market value of approximately $13.3 billion, Occidental presents a compelling opportunity for long-term growth, particularly as it successfully reduces its net debt significantly since purchasing Anadarko in 2019.
Even more intriguing is Buffett’s continued interest in repurchasing shares of Berkshire Hathaway itself. Earlier, the company had strict buyback criteria linked to its share price relative to book value. However, in 2018, Buffett was given greater latitude regarding stock repurchases, leading to 24 consecutive quarters of buyback activity totaling nearly $78 billion. These repurchases not only enhance shareholder value but also reflect Buffett’s confidence in the company’s intrinsic value, especially with Berkshire holding around $277 billion in cash.
As an investor, if you’re contemplating the right time to invest in Berkshire Hathaway, it’s prudent to evaluate the current market landscape. While the Motley Fool’s Stock Advisor team has identified other high-potential stocks worth considering, Buffett’s philosophy and investment moves provide valuable insights for making informed decisions in a fluctuating market.
Buffett’s insights, along with his iconic adherence to long-term investing principles, continue to influence and inspire investors globally. In a world where market volatility can be intimidating, his belief in careful stock selection, coupled with strategic buybacks, reinforces the importance of staying true to one’s investment philosophy.
For anyone looking to navigate the complexities of today’s financial environment, observing Buffett’s strategies offers a roadmap for making investment decisions that stand the test of time. Whether you’re eyeing energy stocks, considering large-cap investments, or contemplating the overseas market, the lessons from the Oracle of Omaha remain as relevant as ever.