Good evening, everyone! Did you know? Buffett has truly shown his 'trader' essence this year! First, he made a big move clearing his position in Apple, and then suddenly bought the dip in Domino's Pizza, leaving people puzzled.
Even more astonishing is that he has recently made another move, significantly increasing his stake in three major companies, one of which has caused a stir—he has once again increased his holdings in Occidental Petroleum!
This is the first time since last year that Buffett has increased his position; what exactly does he want to do? In the face of the rise of renewable energy, why does he still prefer traditional energy? A deep analysis reveals three major secrets behind this!
Buffett's 'long-termism' sentiment towards Occidental Petroleum.
Occidental Petroleum has always been a major holding for Buffett, and Berkshire Hathaway is still its largest shareholder. Since 2019, Buffett has occasionally increased his stake in Occidental Petroleum, and at times he has made large investments for this company. But the question arises—why does Buffett continue to increase his position in traditional energy today, especially with the rapid rise of renewable energy? How does he view this trend?
Buffett has always adhered to 'long-termism'; he firmly believes that oil and gas production is crucial for the United States, effectively reducing America's dependence on external energy. This is not only beneficial for shareholders but also advantageous for national security. Although the world is pushing for a transition to clean energy, Buffett still believes that oil and gas will continue to play an important role in global energy supply over the next decade and even longer.
He publicly stated that renewable energy cannot completely replace traditional energy in the short term, so when he is optimistic about a company, he will firmly increase his position. This time, the stock price of Occidental Petroleum has already dropped by about 30%, making it a good opportunity for Buffett to buy more.
The transition to renewable energy requires consuming more traditional energy.
Why does Buffett still have faith in traditional energy? There is a deeper meaning behind this. As the world accelerates its push for a transition to renewable energy, more and more energy companies are reducing their investments in traditional energy, leading to tight supply in the short term. Factors like nuclear waste conflicts and geopolitical turmoil have made countries' demand for oil and gas increasingly urgent.
Buffett clearly sees this; the uncertainty of future energy supply could bring huge fluctuations, and he is well prepared. Moreover, from a global perspective, the security of energy remains a top priority for many countries, which also presents more investment opportunities for traditional energy.
Buffett is fond of Occidental Petroleum's CEO Vicki Hollub.
Buffett's investment style has always emphasized 'picking people'. He believes that an outstanding founder or management team can lead a company further. Occidental Petroleum's CEO, Vicki Hollub, as the first female CEO in the oil industry, is undoubtedly a leader with great potential in Buffett's eyes. She has stood out in the traditional energy sector with her excellent management skills, leading Occidental Petroleum to continuously innovate and achieve profitability. Buffett has publicly praised her leadership ability on several occasions and expressed great confidence in Occidental Petroleum's management team.
In this regard, Buffett is somewhat similar to domestic investment tycoon Lei Jun, who also emphasizes the capability and potential of founders when investing, having repeatedly stated, 'I only invest in people I like.' It can be said that Buffett's optimism about Occidental Petroleum is not only about the company's financial condition but also about his confidence in Vicki Hollub's leadership.
Buffett's recent moves have not only shocked the investment community but also made many people think deeply. Why, in an era where renewable energy is gradually rising, does Buffett continue to increase his position in traditional energy, especially in Occidental Petroleum? Is it that the 'Oracle of Omaha' is cunning, or has he already seen through the future trends of the energy market?
Regardless of the circumstances, every move Buffett makes deserves our deep reflection. Perhaps this is the reason he can become the 'Oracle of Omaha'—he can always see future opportunities when others cannot.