In the last post, I incorrectly suggested that he was stuck with the $168 billion in cash. One of the most attractive sectors is the resource space is represented by ExxonMobil below:
Buffett already owns a large chunk of ConocoPhillips (COP). He could easily begin to accumulate more of the other oil majors such as XOM and Chevron (CVX), as well as adding to his COP holding. There are plenty of good choices in the space that could “move the needle”.
Several of these companies are generating sizable amounts of cash, as well as paying attractive dividends, even at current commodity prices. My expectation is that the price of oil could easily double before the end of the year. Throw in large institutions piling back into fossil fuels, and the upside should be substantial.
Given his decades ago dalliance with the precious metals, that would be another attractive sector for him. It looks like the precious metals producers are forming powerful technical bottoms riding on the strength of the underlying pricing for the metals.
We should expect Berkshire Hathaway announcements soon would be my guess.
Just as we have seen a stampede into Bitcoin/Crypto, similar stampedes should be anticipated going into industrial commodities. Fossil fuels, uranium, coal, copper, and “base” metals should all see powerful pricing this year.
Is he in treasuries with that much money? With inflation buffet is taking a hit.