Over the weekend, Omaha saw a gathering of approximately 40,000 investors for Berkshire Hathaway’s annual shareholder meeting, all eager to hear from Warren Buffett, dubbed the “Oracle of Omaha.” Buffett, who took over as CEO in the mid-1960s, has consistently outperformed Wall Street’s stock indexes. While the S&P 500 achieved a remarkable return of nearly 34,000% during his tenure, Buffett led Berkshire Hathaway’s Class A shares to an astonishing return of almost 4,900,000%. This unparalleled success has made investors eagerly anticipate Buffett’s insights on stocks, the U.S. economy, and investing philosophy.

Despite the anticipation surrounding Buffett’s investment moves, his significant stock purchases are not revealed in the usual 13F filings. Over the past six quarters, Berkshire Hathaway has been notably more inclined to sell than buy, with a $56 billion difference between sales and purchases of equity securities from October 2022 to March 2024. This trend indicates Buffett’s and his team’s selective approach to buying investments, a strategy they’ve maintained for over a year.

Despite this trend, one notable exception in Berkshire Hathaway’s investment strategy is Occidental Petroleum. Buffett has been consistently adding to Berkshire’s stake in Occidental over the past two years, considering it an “indefinite” holding. His affinity for Occidental stems from its role in supplying oil, a necessity for both the U.S. and global economies. Moreover, Occidental’s revenue primarily comes from its drilling segment, positioning it uniquely to benefit from sustained or rising crude oil prices.

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Beyond Occidental Petroleum’s fundamentals, macro factors also favor the company. Reduced capital investment from energy majors over the past three years, due to pandemic-related uncertainty, has led to a constrained global supply of oil. This shortage suggests that the demand for oil is unlikely to be oversupplied in the near future, further bolstering Occidental’s position in the market.

Source: The Motley Fool