Status: 02/15/2022 1:34 p.m
While consumers are suffering from rising oil and energy prices, multi-billionaire and famous investor Warren Buffett is profiting from the price of oil: oil companies are posting billions in profits again.
The famous financial investor Warren Buffett has increased its exposure to the commodities sector and is betting on rising prices on the oil market. According to the latest mandatory announcements by the US Securities and Exchange Commission (SEC), the seventh richest person in the world, according to the Bloomberg Billionaires Index (BBI), increased his stake in the US oil company Chevron by 33 percent in the fourth quarter of 2021.
At the end of last year, the value of the Chevron stake in the portfolio of Buffett’s investment company Berkshire Hathaway was around $4.5 billion.
Oil companies on the rise
In the past few months, oil prices had risen sharply, which led to massive increases in profits for the oil companies: the economic recovery of the national economies pushed the prices for the Brent and WTI grades up sharply. And as a result of the Ukraine crisis, many observers of the oil market are not ruling out prices of more than $100 a barrel (159 liters). Oil prices hit their highest level since autumn 2014 yesterday.
The adjusted result of the British-Dutch oil company rose from 4.85 billion to 19.3 billion dollars in 2021. BP posted its best result in eight years in 2021. After a loss of $5.7 billion in 2020, the company now made a profit of $12.8 billion.
Buffett’s favorite Chevron is also making good money again. For the full year 2021, the oil company made its highest profit since 2014 at $ 15.7 billion. Since the beginning of the year alone, the share has increased by around 16 percent. That means Berkshire Hathaway made about $720 million from that decision. According to calculations by the BBI, which should be treated with caution, but should probably show the trend correctly, Buffett has become richer by a total of around 4.8 billion dollars in 2022 so far.
Activision Blizzard in depot
The 91-year-old financial investor also made good money with a commitment to the technology sector that he had avoided for a long time in his career. In the fourth quarter of 2021, the “value investor”, which is known as conservative and focuses primarily on conventional sectors, had shares in the games group Activision Blizzard in its portfolio, which were worth almost one billion dollars at the end of December. Whether Buffett made the decision himself or his portfolio managers Todd Combs and Ted Weschler are not clear from the SEC filings.
Perfect timing: On January 18, the technology group Microsoft, co-founded by Bill Gates, announced the planned acquisition of Activision for a price of 68.7 billion dollars. Since the beginning of the year, the share price has risen by around 23 percent. These two investments alone have brought in nearly $1 billion for Berkshire Hathaway.
Buffett wants to donate his fortune
Bill Gates, longtime boss of the technology group Microsoft, has been friends with Buffett for many years and has also had business ties. Gates gave up his position on the Berkshire board of directors in March 2020 to devote more time to his charitable work. At the same time, he gave up his position on the board of directors at Microsoft. Gates had already retired from day-to-day business in mid-2008 and also resigned as chairman of the board in February 2014.
Bill Gates (left) and Warren Buffett
Buffett resigned from the Board of Trustees of the Bill and Melinda Gates Foundation, the world’s largest private foundation, in June 2021. In 2010, he and Gates co-founded The Giving Pledge. Billionaires promise to donate at least half of their wealth to good causes. Buffett has announced that he will donate all of his Berkshire shares, the majority of his wealth, to five foundations, including the Bill and Melinda Gates Foundation.