Buffetteer Posted February 17, 2015 Share Posted February 17, 2015 WOW!!! Link to comment Share on other sites More sharing options...
Grenville Posted February 17, 2015 Share Posted February 17, 2015 ~4bln position last qtr. That's a large stake sale. Surprised CNBC isn't all over this. Link to comment Share on other sites More sharing options...
Jurgis Posted February 17, 2015 Share Posted February 17, 2015 This is interesting. :) Think about it: Buffett makes tons of money on PetroChina. I guess he thinks "I can do it in oil". Then he buys COP - does not do well, sells. Buys XOM, does not do well, sells. Does he now think "Nah, I can't do it in oil"? :) Note: all errors and omissions mine. I went from memory and was too lazy to check facts. :) Link to comment Share on other sites More sharing options...
Mephistopheles Posted February 18, 2015 Share Posted February 18, 2015 I remember him once saying that the oil business is easy to analyze. Interesting given that oil prices collapsed after he bought both COP and XOM, so the timing proved to be terrible. lol This shows even the great ones are human. Link to comment Share on other sites More sharing options...
EliG Posted February 18, 2015 Share Posted February 18, 2015 It's curious that BRK added 20% to Suncor in the same quarter. Granted, it's a much smaller position than XOM. Suncor is Ted Weschler's pick if I recall correctly. Is he bullish on oil while Buffett is bearish?? That's an odd looking pair of transactions. Link to comment Share on other sites More sharing options...
sleepydragon Posted February 18, 2015 Share Posted February 18, 2015 I remembered Buffet said in an interview something like: "The best business is still those that need little capital but generate a lot of cash". XOM is capx intensive. Or maybe he's selling to get more cash for an Elephant deal. He had said before that he will first sell his smaller holdings when he need cash to get deal down. Link to comment Share on other sites More sharing options...
Palantir Posted February 18, 2015 Share Posted February 18, 2015 Do you think it could be a panic sell after watching oil prices crash? Bad memories of that oil bet in 08? Link to comment Share on other sites More sharing options...
Charlie Posted February 18, 2015 Share Posted February 18, 2015 I wonder if Buffett could "hide" his Exxon stake, so that he can buy more cheaply!? ??? Probably the annual report will show if he really sold Exxon. Link to comment Share on other sites More sharing options...
thepupil Posted February 18, 2015 Share Posted February 18, 2015 maybe he sold because the price / near term earnings power rose by a lot. I understand he is super long term, but he is not completely blind to valuation and near term fundamentals either. XOM is still primarily an upstream company in terms of profitability. The stock is arguably more expensive than ever. Link to comment Share on other sites More sharing options...
ni-co Posted February 18, 2015 Share Posted February 18, 2015 There are only two logical answers: Either Buffett decided to put oil stocks on the "too hard pile" or he regarded the long term risk reward ratio for oil stocks as too bad. Link to comment Share on other sites More sharing options...
peter1234 Posted February 18, 2015 Share Posted February 18, 2015 There are only two logical answers: Either Buffett decided to put oil stocks on the "too hard pile" or he regarded the long term risk reward ratio for oil stocks as too bad. Or he needed a cool 4b for the big elephant. ;D Link to comment Share on other sites More sharing options...
ni-co Posted February 18, 2015 Share Posted February 18, 2015 There are only two logical answers: Either Buffett decided to put oil stocks on the "too hard pile" or he regarded the long term risk reward ratio for oil stocks as too bad. Or he needed a cool 4b for the big elephant. ;D With debt cost this low? Berkshire would essentially be paid if it took a loan to buy an elephant. I think it's highly improbable that "he was young and he needed the cash" is the explanation for this. Link to comment Share on other sites More sharing options...
rpadebet Posted February 18, 2015 Share Posted February 18, 2015 There are only two logical answers: Either Buffett decided to put oil stocks on the "too hard pile" or he regarded the long term risk reward ratio for oil stocks as too bad. I think it was more of a "capital allocation" decision 8) Nowadays he seems to prefer large businesses like railways where they not only generate tons of cash flow after maintenance capex, but also are able to invest a lot in growth capex internally i.e. long growth runway. My guess is he thought Exxon could be one of those as well but with what happened with Oil industry, he probably thinks Exxon's internal/industry investment opportunities are limited for the foreseeable future. Link to comment Share on other sites More sharing options...
rpadebet Posted February 18, 2015 Share Posted February 18, 2015 There are only two logical answers: Either Buffett decided to put oil stocks on the "too hard pile" or he regarded the long term risk reward ratio for oil stocks as too bad. I think it was more of a "capital allocation" decision 8) Nowadays he seems to prefer large businesses like railways where they not only generate tons of cash flow after maintenance capex, but also are able to invest a lot in growth capex internally i.e. long growth runway. My guess is he thought Exxon could be one of those as well but with what happened with Oil industry, he probably thinks Exxon's internal/industry investment opportunities are limited for the foreseeable future. Scratch the previous rationale.... The Oracle obviously foresaw this happening today http://www.cnbc.com/id/102435803 Link to comment Share on other sites More sharing options...
Mephistopheles Posted February 18, 2015 Share Posted February 18, 2015 Scratch the previous rationale.... The Oracle obviously foresaw this happening today http://www.cnbc.com/id/102435803 This is what makes Buffett great. He is able to see risks that aren't even accounted for, before they occur. Pure genius. Link to comment Share on other sites More sharing options...
watsa_is_a_randian_hero Posted February 19, 2015 Share Posted February 19, 2015 There are only two logical answers: Either Buffett decided to put oil stocks on the "too hard pile" or he regarded the long term risk reward ratio for oil stocks as too bad. Or he needed a cool 4b for the big elephant. ;D or he decided XOM was not the best value in the industry, and he is buying something else in the industry (undisclosed with SEC waiver, which is not unprecedented for him). personally I think XOM has been trading very expensive relative to other opportunities in energy right now. Link to comment Share on other sites More sharing options...
KCLarkin Posted February 19, 2015 Share Posted February 19, 2015 (undisclosed with SEC waiver, which is not unprecedented for him) This would be noted in 13F as confidential disclosure (there were none in Q4). Link to comment Share on other sites More sharing options...
dcollon Posted February 19, 2015 Share Posted February 19, 2015 Why everyone — even Warren Buffett — got oil prices wrong (Washington Post) http://www.washingtonpost.com/blogs/wonkblog/wp/2015/02/19/why-everyone-even-warren-buffett-got-oil-prices-wrong/ Link to comment Share on other sites More sharing options...
Jurgis Posted February 19, 2015 Share Posted February 19, 2015 Why everyone — even Warren Buffett — got oil prices wrong (Washington Post) http://www.washingtonpost.com/blogs/wonkblog/wp/2015/02/19/why-everyone-even-warren-buffett-got-oil-prices-wrong/ Oil companies borrowed $200 billion to expand their drilling during the boom, so they can't afford to stop drilling during the bust. I love how people keep repeating this without spending even a minute to check the facts. Apparently all the 40-80% capex drop announcements are fiction. Link to comment Share on other sites More sharing options...
ccplz Posted February 21, 2015 Share Posted February 21, 2015 Jim Chanos on Exxon Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now