As the stock market faced a rapid downturn in December, one of its most veteran investors, Warren Buffett, seized the opportunity to enhance his investments, notably in Occidental Petroleum. Berkshire Hathaway, his conglomerate, acquired an impressive 8.9 million shares of the energy giant for a total of $405 million. This maneuver pushed Berkshire’s ownership in Occidental to above 28%, as reported in a regulatory filing. Buffett’s strategy seems to be a classic example of “buying the dip,” a tactic that many investors utilize to capitalize on temporarily reduced stock prices.
Apart from Occidental, Buffett expanded Berkshire Hathaway’s portfolio by also investing in Sirius XM and VeriSign. With $113 million allocated to approximately 5 million shares of Sirius XM and around $45 million for about 234,000 shares of VeriSign, these smaller stakes suggest a diversified approach to investment. It is plausible that these particular investments were orchestrated by Buffett’s trusted lieutenants, Todd Combs and Ted Weschler, emphasizing the efficiency of teamwork within Berkshire. Collectively, these recent transactions totaled over $560 million in just a few days, reflecting Buffett’s confidence in these companies despite their current struggles.
This wave of stock purchases occurred amidst a broader market sell-off that had significantly impacted Occidental and Sirius XM. The energy company witnessed a staggering 10% drop in its shares for December alone, accumulating a hefty 24% decline for the year ahead. Once a prominent figure in the oil industry, Occidental is now Berkshire’s sixth-largest equity position, though Buffett has communicated that a full acquisition of the company is not in his plans.
On the other hand, Sirius XM has suffered even more dramatically, as it entered a negative spiral of six consecutive days of losses and an accumulated 62% drop for 2024. The issues plaguing Sirius are manifold, ranging from subscriber losses to adverse demographic shifts. Following a significant restructuring in September involving Liberty Media, Buffett’s increased stake in Sirius, now at about 35%, positions Berkshire to potentially influence the company’s trajectory or benefit from any turnaround.
VeriSign’s performance has also been subpar, with its stock down 6% this year, trailing the overall tech sector. Buffett’s initial investment in VeriSign dates back to 2013, indicating a long-term belief in its fundamentals despite recent underperformance. This consistency highlights Buffett’s often-praised investment philosophy of focusing on inherent business value over short-term market trends.
Warren Buffett’s latest acquisitions reflect a deep understanding of market timing and the potential for long-term gains through strategic investments. By reinforcing his positions in energy and entertainment, Buffett demonstrates not just resilience but also a keen ability to adapt to the dynamic nature of the stock market. As he navigates these turbulent times, his actions serve as a reminder of the power of investing with a seasoned perspective, even in challenging economic landscapes.