Friday, Occidental Petroleum Corp. stock went through the roof after Warren Buffett’s company, Berkshire Hathaway Inc., increased its holdings in the oil and gas company, even though Wall Street was cutting its holdings.
But that fits with a famous trade rule by Warren Buffett: be greedy when other people are afraid.
After dark on Thursday, Buffett’s financial vehicle said it had spent $409.15 million this week to buy more 8,896,890 Occidental shares.
The Berkshire BRK.A BRK of +1.37%.B +0.86% who already owned a lot of Occidental OXY +3.90% shares. It now has 264,178,414 shares, which is 28.15 percent of all the shares that are out there. At these prices, the investment is worth $12.54 billion.
FactSet data shows that investment management company Dodge & Cox owns about 8.3% of Occidental’s outstanding shares, making it the next largest shareholder.
The stock was up more than 4% in the afternoon trading on Friday. It was on track to end a six-session losing streak, which would be the longest in a year. It would be only the third day this month that Occidental shares went up.
There were fears that oil prices CL00 +0.29% BRN00 +0.05% would keep falling, which is why the stock finished Thursday at its lowest price since February 28, 2022.
People are worried that President-elect Donald Trump’s plans for taxes could hurt economic growth both in the U.S. and other countries, which would lower the demand for crude oil.
Trump’s promise to “drill, baby, drill” will increase supply, which could hurt oil prices.
After Trump won the election, the Energy Select Sector SPDR ETF XLE +0.98% went up at first, but it reached its highest point in mid-November and has been going sharply down ever since.
The ETF was up 0.7% on Friday, but it was still down about 12% in December. This means that it is on track for its worst monthly performance since June 2022, when it fell 18%. As of now, it has lost about 7% of its value.
However, crude oil prices CL.1 +0.29% went up a little on Friday. They have lost about 3% since the election, and Occidental’s stock has lost about 6% in the same time period.
In the first three months of 2022, Buffett began buying Occidental stock. It said in its 13F regulatory statement in mid-November that it had held 255,281,524 shares as of September 30, the same number of shares it had held the previous quarter.
The stock has dropped more than 16% since the end of March 2022. The oil ETF, on the other hand, has gone up 10%, and the S&P 500 index SPX +1.09% has gone up over 31%.
