As the year draws to a close, iconic investor Warren Buffett has made significant moves in the stock market, using the recent downturn to his advantage. Amid a rapid sell-off in December, Buffett’s holding company, Berkshire Hathaway, added a substantial number of shares in Occidental Petroleum, Sirius XM, and VeriSign. This strategic acquisition spree amounting to over $560 million highlights Buffett’s keen ability to identify value in disheartened markets.
Berkshire’s significant purchase of 8.9 million shares of Occidental Petroleum has pushed its holdings in the company beyond 28%. The investment, executed over just a few days, underscores Buffet’s confidence in Occidental, particularly as its stock has underperformed, dropping 10% this month and 24% year-to-date. Despite performing poorly in the short term, Buffett appears to perceive potential for recovery in a company that has historical significance, stemming from its foundational ties to famed oilman Armand Hammer. Interestingly, Buffett has opted against a full takeover, suggesting a calculated yet cautious approach to his investment strategy.
Berkshire’s investments are not limited to energy markets. The firm has also acquired approximately 5 million shares of Sirius XM and around 234,000 shares of VeriSign. While these transactions are modest compared to the Occidental purchase, they reveal an ongoing interest in companies facing difficulties. Sirius XM, for instance, has been experiencing a tough stretch, with its shares tumbling by 23% in December alone and 62% throughout the year. The catalyst for Berkshire’s growing stake, now standing at approximately 35%, appears linked to the completion of Liberty Media’s consolidation of its audio entertainment assets. This alignment could present an intriguing opportunity as Sirius XM navigates subscriber losses and shifting demographics.
VeriSign, a tech stock that has been part of Berkshire’s portfolio since 2013, has struggled as well, showing a 6% decline so far in 2024. Unlike the other acquisitions, this investment reflects Buffett’s long-term perspective on tech, albeit with less frequent adjustments to his holdings.
The timing of these purchases is a testament to Buffett’s philosophy of ‘buying low.’ By taking full advantage of the market’s temporary setbacks, he demonstrates an unwavering commitment to value investing. Whether through direct activity or by entrusting his deputies, Todd Combs and Ted Weschler, Buffett remains highly engaged in seeking opportunities even amidst market volatility. His actions prompt reflection among investors on the importance of patience and strategic positioning during downturns.
As 2023 comes to a close, Buffett’s recent activities not only underscore his belief in the long-term fundamentals of these companies, but they also reinforce his reputation as a master strategist in navigating the complexities of the stock market. His investment choices will certainly be monitored as indicators of market performance heading into the new year.