Which Stocks Did Warren Buffett Buy?

Warren Buffett is probably the world’s most famous investor. He chooses stocks so well that people call him the “Oracle of Omaha.” It certainly doesn’t hurt that he has a net worth of about $80 billion. That’s practically enough money to fund NYC for an entire year!

Despite his nickname as an “Oracle,” Buffett doesn’t make decisions by staring into a crystal ball or by breathing vapors that send him into a stock-picking trance. He and the board of directors at Berkshire Hathaway manage their portfolio with a data-driven approach that involves plenty of research and studying industry trends.

If you want to build an amazing portfolio, it helps to start with one question, “What stocks did Warren Buffett buy?” 

Is Barrick Gold A Bet On Rising Fear?

Many people were surprised in August when Buffett bought shares in Barrick Gold (GOLD). A handful of “gold standard” supporters probably assume that Buffett invested in Barrick Gold because of the economy’s ongoing unpredictability.

After all, Buffett famously panned gold for decades. He’s stated previously that buying gold is a bet on people becoming more afraid in the future. This is an ominous sign for those who are optimistic about what the future holds. Perhaps Buffett sees clouds on the horizon.

Buffett has also stated that if you could buy all the gold in the US or numerous Exxon Mobils plus all the farmland in the US, which at the time were about evenly priced, the latter would be the better bet. Gold produces no cash flow while the farmland and Exxons would produce cash flow long into the future.

Technically speaking:

• A look at Barrick Gold’s 20-year stock value shows that now might present a good time to invest. In 2011, the stock prices exceeded $55 before crashing to $6.75 by mid-2015. The current price, just under $30, looks like a happy medium. If the company experiences another peak, then shares will earn Berkshire Hathaway a lot of money.
• Barrick Gold recently sold $1.5 billion to lower its debt. Combining the lower debt with assistance from Berkshire Hathaway makes it more likely that the company’s market cap will improve.
• Buffett may not have picked this stock. It’s outside of his wheelhouse, so it’s possible another investment manager within Berkshire Hathaway probably made the move. Still, it’s unlikely they wouldn’t have done so without consulting Buffett. Given Buffett’s exceptional head for numbers, he must have seen something promising in Barrick Gold.

Suncor Energy

In 2019, Berkshire Hathaway purchased 10.8 million shares in Suncor Energy (SU). As of August 2020, the investment doesn’t look like a great deal. The stock value peaked in January 2020, just shy of $34.50. It hasn’t rebounded since.

This looks like an uncharacteristically bad decision by Buffett. Instead of assuming that he made a mistake, try to see the underlying intelligence of buying into Suncor Energy.

Remember that Buffett and his company do not believe in short-term investments. They predominantly buy and hold. When you think about the purchase from that perspective, Suncor Energy makes much more sense.

Buffett may pay attention to positive aspects of Suncor Energy, such as its:

• Ownership of refineries and pipelines that gives it more control over energy production.
• Pipeline ownership that will let Suncor Energy continue moving oil even while other Canadian companies struggle.
• Ability to hold on to refined oil until the commodity because more valuable, and which point it can start raking in serious cash.

The price of oil may have had a detrimental effect on Suncor so far but a rebound in commodity prices, and oil in particular could be a boon for Suncor, and ultimately for Berkshire Hathaway.

Is Store Capital Amazon-Proof?

Unlike regular retail stores, Store Capital Corp (STOR) is a bit more Amazon-proof than you might think at first glance. 

While the fear of most commercial real estate companies is that Amazon will put its tenants out of business, Store Capital has a more interesting array of tenants (more on that in a moment).

Sure, like most other stocks its market capitalization value crashed after the COVID-19 pandemic forced brick-and-mortar locations to close. As offices, restaurants, and retail stores closed, Store Capital’s value plummeted.

But look beyond these primary assets to see some of the other properties that Store Capital supports. They include urgent care clinics, veterinary clinics, pet boarding centers, and buildings for education.

Despite the trend toward ecommerce shopping, many of these businesses require face-to-face interactions. They will rebound once the country recovers from COVID-19.

In fact, the pandemic created the perfect opportunity to invest! Within a couple of years, Store Capital’s value will probably return to normal. When that happens, Berkshire Hathaway will have doubled its money.

When Stocks Crashed, Kroger Bucked The Trend

You won’t find many companies with stock values increasing during the worst of the pandemic. Kroger (KR) stands out as a rare exception.

After all, people need to buy essential items, including food and toiletries. Kroger has kept up with safety guidelines to make shoppers feel comfortable coming to their stores.

Kroger has also increased its curbside and delivery services to attract business from families on lockdown.

Kroger has the capital and technological resources to keep evolving with consumer needs. It is by far the largest grocery store chain in the United States. It has twice as many locations as Albertson’s, its closest competitor.

Anyone looking several years ahead sees that Kroger will retain market dominance. The biggest surprise is that it took this long for Berkshire Hathaway to start buying shares.

From a recent interview, Buffett explained that it was one of his investment lieutenants made the decision to buy.

So Which Stocks Did Warren Buffett Buy?

Knowing which stocks did Warren Buffett buy doesn’t always mean that you can make amazing decisions for your portfolio. A little insight into the Oracle’s stock purchases, though, cannot hurt.

If you have enough money that you can wait a few months or years for stock prices to rise, it makes sense to review Buffett’s moves and decide whether they fit your portfolio’s needs.

Kroger bucks the general market trend when fears of a recession spike. Store Capital is virtually Amazon-proof, unlike most other real estate companies. Suncor could bounce back well when oil prices rise again. And if the economy worsens, Barrick Gold offers a safe haven in the Berkshire portfolio.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.