Devon Shire Over At SeekingAlpha: Why Warren Bought Huge Stake In XOM

Over at SeekingAlpha:

The questions many people would like answered is why Exxon and why now? I'm not sure about the why NOW part as Exxon's shares have been around this price for quite some time, but I think I've got a pretty good idea about the why.

Despite the recent media cries of an American oil glut I think that Buffett believes that oil prices are going higher in the future. How do I know that Buffett thinks oil prices are going higher? His partner Charlie Munger told me so.

Earlier this year I came across a roundtable conversation that included Berkshire Hathaway's eighty-eight year old vice-chairman Charlie Munger. Munger is one of the most rational thinkers the investment world has ever seen and he and Buffett are almost always on the same page.

Here is some of what Munger had to say about future oil prices and what he thinks should be proper energy policy:

"Oil is absolutely certain to become incredibly short in supply and very high priced. The imported oil is not your enemy, it's your friend. Every barrel that you use up that comes from somebody else is a barrel of your precious oil which you're going to need to feed your people and maintain your civilization. And what responsible people do with a Confucian ethos is suffer now to benefit themselves and their families and their countrymen later. The way to do that is to go very slow in producing domestic oil and not mind at all if we pay prices that look ruinous for foreign oil.

I remember that interview. I don't recall if I posted the link at the time. There were parts about the interview I did not agree with, but his underlying thesis was right on target.  

Oh, yes, here it is: my original post on Munger back on July 25, 2013.