Warren Buffett, the renowned investor and CEO of Berkshire Hathaway, appears to have taken advantage of a recent downturn in the stock market just before Christmas. This month, a wave of selling prompted a drop in stock prices, creating an opportunity for savvy investors like Buffett to pick up valuable shares at discounted rates. Notably, by acquiring approximately 8.9 million shares of Occidental Petroleum for around $405 million, Buffett increased Berkshire’s stake in the company to over 28%. These transactions were executed in a brief but concentrated period, showcasing Buffett’s trademark acquisition strategy where he capitalizes on market inefficiencies.
Additionally, during the same timeframe, Berkshire Hathaway diversified its portfolio further by purchasing about 5 million shares of Sirius XM for roughly $113 million and around 234,000 shares of VeriSign for approximately $45 million. While these latter investments are significantly smaller than the Occidental acquisition, they highlight the breadth of Buffett’s approach, potentially implicating his investment managers, Todd Combs and Ted Weschler, in these decisions. Collectively, these stock purchases amount to over $560 million, underscoring Buffett’s aggressive investment strategy during a market pullback.
The decision to invest heavily in Occidental Petroleum is particularly telling, as the energy company’s stock has seen a decline of over 10% this December and is down 24% year-to-date. Once renowned for its association with oil magnate Armand Hammer, Occidental now faces significant pressures that have reduced its market value. Notably, Buffett has signaled that a full acquisition of the company is not in the cards, despite it becoming one of Berkshire’s major equity holdings.
In stark contrast, Sirius XM has been experiencing a far steeper decline, with its stock plummeting 23% within just six days and 62% over the year. The company’s struggles include a loss of subscribers and adverse demographic shifts, which have raised concerns about its long-term viability. Berkshire’s investment in Sirius XM intensified following Liberty Media’s major restructuring in September, making it interesting to observe whether Buffett and his team believe in the potential recovery of the satellite radio company.
VeriSign, a company specializing in internet infrastructure, has not been spared from the downturn, as its stock has dipped 6% in 2024, lagging behind the broader tech sector. Buffett’s long-standing relationship with VeriSign, which he first invested in back in 2013, reflects a commitment to holding quality assets for the long haul, though the lack of updates to this stake raises questions about its current strategic value to Berkshire Hathaway.
All these transactions reveal a thoughtful and analytical approach to investing, characteristic of Buffett’s philosophy. While he navigates turbulent markets, his ability to recognize value amidst volatility remains unshakeable. The moves made in December serve not only as a testament to his acumen but also represent a balancing act between short-term opportunities and long-term stability—a core principle that has defined Buffett’s illustrious investment career.