Buffett Laments Lack Of Good Investing Targets As Berkshire Reveals Big Bet On Oil

Topline

Billionaire Warren Buffett said Saturday that he is struggling to find good ideas to invest in, echoing the sentiment in his annual letter to stakeholders in February, but his conglomerate Berkshire Hathaway disclosed it has dramatically raised its stake in Chevron, which comes after an investment in Occidental Petroleum last month, deepening its bet on oil amid a surge in crude prices.

Warren Buffett, Chairman and CEO of Berkshire Hathaway, speaks during a game of bridge following the … [+] annual Berkshire Hathaway shareholders meeting in Omaha, Neb. on May 5, 2019. (AP Photo/Nati Harnik, File)

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Key Facts

Buffett said during Berkshire Hathaway’s annual meeting in Omaha, Nebraska, the company has “so much trouble” finding good ideas to invest in, especially in the U.S.

Buffett, 91, added that while Berkshire will “pay any price” and “climb any hills” to seek out new investments, he prefers for companies to proactively approach Berkshire.

One idea Berkshire is showing conviction on is oil, with its first-quarter earnings filing showing it has significantly increased its stake in Chevron, making the oil giant Berkshire’s fourth largest equity holding by value.

Berkshire’s Chevron shares were worth $25.9 billion at the end of March, up from a $4.5 billion stake three months prior, as oil prices surged following Russia’s invasion of Ukraine.

Apple ($159.1 billion), Bank of America ($42.6 billion) and American Express ($28.4 billion) were the three other largest investments for Berkshire, according to the filing.

Berkshire started increasing its bet on oil last month when Buffett purchased 18 million shares of Occidental, and now owns nearly 15% of the petroleum company, which has also seen its stock surge as energy prices spike.

Tangent

Both Buffett and Berkshire Vice Chairman Charlie Munger, 98, warned against “new forms of money” during the annual meeting. Buffett, who has previously called Bitcoin “rat poison,” did not specifically mention cryptocurrency, but he said Berkshire will “always have a lot of cash on hand” as he believes it is the only thing that “will pay bills.” Munger added he thinks people should not put Bitcoin in their retirement accounts, following an announcement from Fidelity that it will allow employees to put Bitcoin in their retirement accounts.

Crucial Quote

Buffett claimed Berkshire would be “better than the banks” at extending credit lines to companies in times of need. He also said he wants Berkshire to be “in a position to operate if the economy stops.” “And that can always happen,” Buffett said.

Big Number

$116.6 billion. That’s Buffett’s net worth, according to Forbes’ real-time wealth tracker, making him the sixth richest person in the world.

What To Watch For

Whether Berkshire will become a trillion-dollar company in the next few years, with its market capitalization topping $700 billion earlier this year, joining companies like Alphabet, Amazon, Apple and Microsoft.