Billionaire investor Warren Buffett has been buying stocks amid the prolonged market rout this year. In the past few months, his
Berkshire Hathaway Inc (BRK-A) boosted its stake in Chevron Corp. ( CVX Quick Quote CVX - Free Report) placed a merger-arbitrage bet on Activision Blizzard Inc. ( ATVI Quick Quote ATVI - Free Report) , acquired shares of HP Inc. (HPQ), Citigroup Inc. ( C Quick Quote C - Free Report) and Ally Financial Inc. (ALLY), and continued adding to its position in Apple Inc. (AAPL), which emerged out as his favorite and biggest stockholding.
The Omaha-based company bought 901,768 shares of
Occidental Petroleum Corp. ( OXY Quick Quote OXY - Free Report) last week, according to a regulatory filing, as quoted on Wall Street Journal. The move made Occidental one of Buffett’s 10 biggest holdings. Warren Buffett once said that it is wise for investors to be “fearful when others are greedy, and greedy when others are fearful.” He is adopting that strategy currently and buying stocks as the market is slumping.
Berkshire ended 2021 with a near-record cash balance of $146.7 billion andinjected $51.1 billion into the market at the start of this year as global stocks are reeling under pressure.
With rising rate worries and geopolitical crisis bringing about uncertainties in the global investment backdrop, many are waiting for the investing tactics of the Oracle of Omaha. For them, below we highlight a few investing strategies.
Buffett Big on Energy: Buy on Low Valuation & Favorable Operating Backdrop
The energy sector has everything – decent valuation, higher dividends and an upbeat operating backdrop.
WTI crude ETF United States Oil Fund LP ( USO Quick Quote USO - Free Report) is up 53% this year. The oil and gas rally this year has been driven by the Russia-Ukraine war (Russia is energy-rich) and rising pent-up demand as global COVID cases are ebbing.
The energy sector recorded a 240.6% earnings expansion in Q1, with 174.1% growth expected in Q2 – the highest in the S&P 500 index. The “Oracle of Omaha’ is bullish on Chevron and Occidental. Chevron pays a 3.38% dividend yield. Chevron-heavy ETFs like
Energy Select Sector SPDR Fund ( XLE Quick Quote XLE - Free Report) and Vanguard Energy ETF (VDE) could be bought as long the trend is your friend. Invesco Dynamic Energy Exploration & Production ETF ( PXE Quick Quote PXE - Free Report) is an Occidental-heavy fund to invest in. Bet on Citigroup-Heavy ETFs
Warren Buffett’s Berkshire Hathaway has made a big bet worth $3 billion on Citigroup. Citi now holds a 2.8% stake in Berkshire Hathaway, according to filings with regulators.The investment came as Buffett exited Wells Fargo, a rival bank that was in Buffett’s portfolio for more than three decades, as quoted on Financial Times.
Citigroup is down 21% this year, underperforming the average financial sector stock in the S&P 500 Index, which is down 16%. It is the only big U.S. bank that trades below book value at 52 cents a dollar, according to FactSet, as quoted on Financial Times.
Invesco KBW Bank ETF ( KBWB Quick Quote KBWB - Free Report) is heavy on Citigroup. Media Could be in Your Cards
Buffett’s company also invested $2.6 billion in
Paramount Global ( PARA Quick Quote PARA - Free Report) , the U.S. media group formerly known as ViacomCBS. Its dividend yield is 3.39% annually. iShares Evolved U.S. Media and Entertainment ETF ( IEME Quick Quote IEME - Free Report) and Invesco S&P 500 Equal Weight Communication Services ETF (EWCO) are two ETFs that have exposure to Paramount Global. Apple & HP: Buffett’s Tech Favorites
Berkshire’s biggest holding was still Apple. One can bet on Apple ETFs like
Technology Select Sector SPDR Fund ( XLK Quick Quote XLK - Free Report) , Fidelity MSCI Information Technology Index ETF (FTEC) and Vanguard Information Technology ETF (VGT).
He is also bullish on HP Inc., which is the surviving entity following the November 2015 split of Hewlett-Packard Company into publicly traded entities — Hewlett Packard Enterprise Company and HP Inc.
The company is a leading global provider of personal computing and other access devices, imaging and printing products, etc. HP Inc. has exposure to
American Customer Satisfaction ETF ( ACSI Quick Quote ACSI - Free Report) .