REUTERS / Rick Wilking
Berkshire Hathaway’s Warren Buffett made a $ 1.2 billion profit on his Chevron investment in less than ten weeks.
The famous investor firm owned a $ 4.1 billion stake in the oil and gas group at the end of December, a regulatory submission revealed last month. Chevron’s share price has since risen 29% as crude prices recovered, raising the value of Berkshire’s stake to $ 5.3 billion.
Berkshire started buying Chevron shares in the third quarter of 2020. He granted permission not to include the stock in the 13-F portfolio update for that period, as he was still building the position.
The company bought 44.3 million Chevron shares in the third quarter, and another 4.2 million shares last month. The energy supply was among its ten largest shares at market value at the end of 2020, Buffett said in his latest letter to shareholders.
Buffett’s decision to support Chevron has so far borne fruit, but it remains quite surprising. After all, Buffett expressed doubts about the oil sector’s prospects at Berkshire’s annual meeting last year following his painful bet on Occidental Petroleum.
“If you are an oxy shareholder or a shareholder in an oil producing company, you will have made a mistake with me so far in terms of where oil prices have gone,” he said. “Who knows where they will go in the future?”
Buffett also stepped in to help Occidental knock out Chevron in a bid war for Anadarko Petroleum in 2019. His subsequent bet on Chevron suggests there is no bad blood left from the collision.