There are a lot of good reasons to pay attention to every investment decision Warren Buffett makes.
Besides being the chairman and CEO of the eighth largest public company in the world, Buffett has an impressive track record as an investor. Since taking control of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) in 1965, he’s grown the value of the business, including its investments, by a compound annual growth rate of 19.8%. That compares with the 10.2% compound total return of the S&P 500 index during that time. Anyone who invested in Berkshire instead of an average S&P 500 fund would have 140 times the amount of wealth today.
In recent years, Buffett has been hard-pressed to find a great company to buy. As Berkshire Hathaway grows larger, its operations spin off more cash, and Buffett has seen the company’s cash pile grow faster than he can find good investments. His largest investment last year totaled $9.2 billion, while the company ended the year with $167.6 billion.
It’s a good bet Buffett will continue to snatch up shares of the company this year, as he sees it as undervalued in today’s market.
Image source: The Motley Fool.
Buffett’s biggest investment last year
As mentioned, Buffett hasn’t seen a whole lot to like in the stock market over the past year, so his new investments have been few and far between.
One stock that he consistently added to in 2023 and continues to buy in 2024, though, is Occidental Petroleum (NYSE: OXY). The company holds a strong position in the Permian Basin, giving it access to some of the lowest-cost oil supply in the country. Berkshire Hathaway first invested in Occidental with the purchase of $10 billion in preferred shares in 2019 to support the oil company’s purchase of Anadarko. Buffett has since taken a massive 28% stake in the company through its common stock, more than offsetting Occidental’s retirement of his preferred shares over the past year. Still, Buffett’s Occidental purchases in 2023 only added up to about $3 billion.
There’s another company Buffett bought a significant stake in last year as well. However, we still…
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