Buffett’s $189 Billion Piggy Bank and the OXY Stock He’s Holding

Warren Buffett loves his OXY stock. When it came out recently that the Oracle from Omaha was keeping Berkshire’s piggy bank full to the brim with $189 BILLION in cash at the end of the first quarter, investors sat up and took notice. 

Why would he be more comfortable holding onto so much cash than investing it in the market? Because the bull market that has pumped the S&P 500 nearly 30% higher since last November finally hit its first hiccup in April. 

Whether or not the bull is done running — and if it IS done running, it would end up being a relatively weak bull run compared to others — there’s no question that something has Uncle Warren spooked. 

During the first quarter, Berkshire trimmed a significant number of their shares in Apple, although I’ll note that it still remains their largest position. Berkshire even sliced off a piece of Chevron, another major holding.

You can’t help but wonder if the market feels a little too toppy for Buffett? 

Perhaps, but that isn’t going to stop him from stepping up to the plate. 

And we can learn a thing or two from his strategy. 

Swinging Away in the Energy Sector With OXY Stock

When asked about the horde of cash sitting on the sidelines of Berkshire and the selling off of Apple and Chevron shares, Buffett replied, “We only swing at pitches we like.”

Well, we know exactly where he likes his pitches: Oil. 

It’s no secret that Buffett is a big fan of putting his money into oil stocks. Truth is, Buffett has been long on oil since his very first trade. 

After all, this is the guy who has said if you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.” 

Like he said, Warren is swinging at the pitches he likes. And for the last few years, he’s been swinging away at one in particular. 

Two years ago, Berkshire started loading up on Occidental Petroleum (NYSE:OXY) between $57 and $61.50. He saw another buying opportunity after picking up another $245.7 million worth of OXY stock in February, which was just a few months after he dished out $588.7 million for shares in December, 2023. 

One thing has become clear to us — Buffett is hungry for energy.

Beating Buffett at His Own Game Without Buying OXY Stock

Look, the veteran readers in our investment community know that it’s easy to beat Buffett at his own game. 

Remember, Buffett is handcuffed by his vast fortune.

You see, he HAS to target the biggest fish in the sea. Companies like Occidental and Chevron may make him a pretty penny, but they won’t bring nearly the same returns as some of the smaller players in the sector.

Since we talked about beating Buffett’s oil bet last February, his OXY position has returned a solid 12%, while his Chevron position grew a more modest 7%. If you directed your cash toward our favorite oil play, Diamondback Energy, you would’ve doubled those OXY gains. 

However, the cat is out of the bag after Diamondback announced it would merge with Endeavor Energy Resources later this year in a deal worth a reported $26 billion. 

Believe me, there aren’t many of those overlooked players left in the world’s biggest oil patch — the Permian Basin. That’s why finding them is so crucial… I’ll show you one of those last remaining investment gems here.

So with $189 billion in cash sitting on the bench, the real question is where will Buffett look next.

Interestingly, we do have a few clues given to us by the man himself. 

In a recent interview, Buffett told the world that he’s looking at one thing right now in an unlikely of places — Canada.

Do you think it’s a coincidence that the world’s most powerful investor in history is looking north for investments at the exact moment that Canadian regulators officially gave the Trans Mountain pipeline expansion the go-ahead to be placed into service?

Now considering the fact that Canadian oil stocks have been waiting for more than a decade to tap into the Asian markets these Alberta oil sands are chock full of undervalued companies — which just so happens to be Buffett’s favorite type of investment. 

I think it’s only a matter of time before he makes his move. 

Until next time,

Keith Kohl

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A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.

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