Even if they are called “stock gods”, there will be times when they are wrong.
Asked about investing at Berkshire’s (BRK.A-US) (BRK.B-US) annual shareholder meeting in April, Buffett said at the time that Berkshire sometimes gets out too early.
Buffett said that if a stock goes down after an initial purchase, he is usually happy to see that happen because it allows him to buy more.
He gave an example: Berkshire bought stocks aggressively in late 2008, but US stocks bottomed out in March 2009 a few months later.
“We’ve never been very good at timing a purchase, but we’ve been better at judging when an investment is going to make enough money,” he said.
Berkshire has been buying stocks aggressively this year, with the largest purchases in the first quarter exceeding $50 billion.
Barron’s estimates that some of these stocks are now trading below where they were bought, notably Citi (C-US), Paramount Universal (PARA-US) and Hewlett-Packard (HPQ-US).
That means investors can buy the stocks for less than Buffett or his two lieutenants, Todd Combs and Ted Weschler.
According to estimates, Berkshire’s average price to buy HP is around $35 per share; HP closed at $26.94 on Monday (19th); the average price to buy Citi was about $58 per share, and Citigroup closed at $48.26 on Monday US dollar; the average price to buy Paramount Universal is about $32 per share, and the stock closed at $23.1 on Monday.
According to the share information published on June 30, Berkshire Holding has about US$2.6 billion in Citigroup, US$1.8 billion in Paramount Universal, and US$3.3 billion in HP.
Berkshire has never disclosed the average price it bought the three companies for. The above estimates are based on average share prices between February 22 and March 15, the same period when Berkshire was aggressively buying stocks in the first quarter. Buffett, who mentioned this window at the annual shareholder meeting, said that Berkshire took advantage of the three-week market decline to aggressively buy stocks.
Berkshire’s investment in Occidental Petroleum (OXY-US) is profitable. Began buying in early 2022, and has since added multiples, and currently holds 188 million Occidental shares, a 20% stake, worth $12 billion. Most of the shares were bought for about $54 a share, according to estimates in documents disclosed by Berkshire. Occidental closed at $64.68 on Monday.
In addition, Berkshire’s investment in Activision Blizzard (ATVI-US) is estimated to have lost money. Activision Blizzard was aggressively bought at around $80 a share in the first quarter of this year, and the stock closed around $76 on Monday.
