Buffett Buys More Oxy? May 30, 2023

Locator: 44800BRK.  

Link here.

Link here.

Buffett Is Full Of Crap -- January 13, 2023

Link here.

I hate to be blunt, and crass, but that's a bunch of crap ... or bullshit ... or whatever. In fact, Buffett likes companies whose names start with "A," "B," or "C." He never gets much farther down the alphabet unless the CEO flies to Omaha to beg for help (an "O" company).

Companies whose names start with "A," "B," or "C"accounted for well over 60% of his portfolio until the recent Wall Street bear market. Companies that he owns outright (see way below) at least get to the "X" in the alphabet.

Why in the world does Buffett invest in companies that make up less than 1% of his entire portfolio, which is the vast majority of his holdings -- companies that make up less than 1% of his entire portfolio.

Link here. It took three screenshots to get his entire portfolio, and this does not include the companies he owns outright. 

According to the 2021 annual report:

Warren Buffett, through Berkshire Hathaway Inc owns 65 distinct companies, divided into a complex web of over 260 subsidiaries.

1. Acme Brick Company
2. HomeServices of America
3. Applied Underwriters
4. International Dairy Queen, Inc.
5. Ben Bridge Jeweler
6. IMC International Metalworking Companies
7. Benjamin Moore & Co.
8. Johns Manville
9. Berkshire Hathaway Automotive
10. Jordan’s Furniture
11. Berkshire Hathaway Direct Insurance Company (THREE)
12. Justin Brands
13. Berkshire Hathaway Energy Company
14. H. Brown Shoe Group
15. Berkshire Hathaway GUARD Insurance Companies
16. Larson-Juhl
17. Berkshire Hathaway Homestate Companies
18. LiquidPower Specialty Products Inc. (LSPI)
19. Berkshire Hathaway Specialty Insurance
20. Louis – Motorcycle & Leisure
21. BH Media Group
22. Lubrizol Corporation
23. biBERK Business Insurance
24. Marmon Holdings, Inc.
25. BoatU.S.
26. McLane Company
27. Borsheims Fine Jewelry
28. MedPro Group
29. Brooks
30. MiTek Inc.
31. Buffalo NEWS, Buffalo NY
32. MLMIC Insurance Company
33. BNSF
34. National Indemnity Company
35. Business Wire
36. Nebraska Furniture Mart
37. Central States Indemnity Company
38. NetJets®
39. Charter Brokerage
40. Oriental Trading Company
41. Clayton Homes
42. Pampered Chef®
43. CORT Business Services
44. Precision Castparts Corp.
45. CTB Inc.
46. Precision Steel Warehouse, Inc.
47. Duracell
48. RC Willey Home Furnishings
49. Fechheimer Brothers Company
50. Richline Group
51. FlightSafety
52. Scott Fetzer Companies
53. Forest River
54. See’s Candies
55. Fruit of the Loom Companies
56. Shaw Industries
57. Garan Incorporated
58. Star Furniture
59. Gateway Underwriters Agency
60. TTI, Inc.
61. GEICO Auto Insurance
62. United States Liability Insurance Group
63. General Re
64. XTRA Corporation
65. Helzberg Diamonds

As Buffett himself says, "diversification is protection against ignorance."

Didn't Peter Lynch limit himself to ten companies at a time?

Update On Buffett - OXY -- August 21, 2022

For background, see this post.

Now, the most recent update from The WSJ.  

The WSJ articles alidates / corroborates my thoughts, as previously posted, but also provides insight into the additional reasons why Buffett sought permission for 50% ownership.  

From the article:

• Analysts have said Occidental’s oil business would complement Berkshire’s existing energy holdings, which include utilities, natural gas and renewables. 
• Mr. Buffett has a warm relationship with Chief Executive Vicki Hollub and has publicly praised her efforts to turn the company around after its acquisition of Anadarko Petroleum Corp. and her plans to pay down debt and increase dividend payouts.
• But Mr. Buffett hasn’t informed Occidental of any plans to acquire a controlling stake in the company, according to people close to the matter. 
• Given Mr. Buffett’s well-known aversion to hostile deal making, it would be out of character for him to make a bid without sounding out the company’s executives and directors first.
• Holdings in OXY:
• Filings show Berkshire currently has a 20% stake in Occidental. It also has warrants to purchase another 83.9 million common shares and 100,000 shares of preferred stock that pay a hefty dividend—both of which it acquired after helping Occidental finance its 2019 acquisition of Anadarko.
• Outstanding OXY shares: 931.49 million, currently. 
• Occidental Petroleum 2021 shares outstanding were 0.959B, a 4.36% increase from 2020.
• Occidental Petroleum 2020 shares outstanding were 0.919B, a 13.49% increase from 2019.
• Occidental Petroleum 2019 shares outstanding were 0.81B, a 6.05% increase from 2018.
  
• If Berkshire were to exercise the warrants, its stake would rise to roughly 27%. That would have exceeded the 25% limit FERC allowed for before Friday’s ruling. 
• Taxes could also play a role in Mr. Buffett’s bid for a bigger minority stake in Occidental. Corporations with a stake of at least 20% in another company are eligible to deduct 65% of dividends received, up from the standard 50%. 
• Berkshire’s 20% stake also allows it to include a proportionate share of Occidental’s earnings in its own results. That could give its earnings a multibillion-dollar boost annually, based on analyst estimates of Occidental’s earnings. Before the most recent purchases, disclosed this month, Occidental fell below the 20% threshold for both benefits. 
• Since Berkshire started buying Occidental shares in February, 2022, Mr. Buffett has had a friendly and collaborative relationship with Ms. Hollub, and the pair speak regularly, according to people familiar with the matter. When Mr. Buffett bought another slug of Occidental shares this spring, he called Ms. Hollub to let her know about the transaction, according to one of the people. Ms. Hollub was driving at the time and pulled over to take the call, the person said.