Warren Buffett’s Berkshire Hathaway has earned $ 1.2 billion in profits from its investment in Chevron in less than 10 weeks.
The company of a well-known investor owned 2.5% of the shares in the oil and gas group worth 4.1 billion dollars at the end of December, revealed in a regulatory statement last month. Since then, Chevron’s share price has jumped 29 percent after commodity prices recovered, raising Berkshire̵
Berkshire began buying shares in Chevron in the third quarter of 2020. It received regulatory permission not to include shares in its 13-F portfolio update for that period, as it was still building the position.
The company bought 44.3 million shares of Chevron in the third quarter and another 4.2 million shares in the last quarter, it said in a statement last month. The energy stock ranks among its 10 largest holdings at market value at the end of 2020, Buffett said in his latest letter to shareholders.
Buffett’s decision to support Chevron has paid off so far, but remains somewhat surprising. After all, Buffett expressed doubts about the prospects for the oil sector at Berkshire’s annual meeting last year, following his painful bet on Occidental Petroleum.
“If you are a shareholder of Oxy or any shareholder in any oil company, you will join me, so far I have made a mistake about where oil prices have gone,” he said. “Who knows where they are going in the future?”
Buffett also stepped in to help Occidental defeat Chevron in a bidding war for Anadarko Petroleum in 2019. His subsequent bet on Chevron suggests there is no bad blood left from the clash.