Berkshire Hathaway bets billions on mobile telecoms and oil giants – with insights from The Wall Street Journal

Written on 02/17/2021
Melani Nathan

Berkshire Hathaway has bet $12.7bn on mobile telecoms and oil giants. “You can bet on America, but you are going to have to be careful on how you bet,” said Buffett.

Investing icon Warren Buffet sits at the head of one of the most closely watched investment vehicles of our time. Berkshire Hathaway is a holding company with a diverse group of businesses under its mantle. When Berkshire Hathaway moves its money, one can be certain that legions of loyal followers will take the cue. The company’s latest purchases; Verizon Communications and Chevron Corporation shares were part of an investment reshuffle. The Wall Street Journal unpacks Berkshire Hathaway’s latest moves and the signals being sent to investors by the ‘Oracle of Omaha’. – Melani Nathan

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Buffett’s Berkshire Hathaway Bets Billions on Verizon and Chevron

Conglomerate has purchased $8.6 billion in mobile carrier’s stock and $4.1 billion in oil company’s shares

By Jenna Telesca of The Wall Street Journal

Updated Feb. 16, 2021 6:48 pm ET

The billionaire Warren Buffett added two more big, American brands to Berkshire Hathaway Inc.’s investment portfolio.

Mr. Buffett’s conglomerate has purchased $8.6 billion in stock in Verizon Communications Inc., the largest U.S. mobile carrier, and $4.1 billion in the oil company Chevron Corp.CVX 2.05% according to a snapshot of investments held in the quarter ended Dec. 31.

It isn’t clear in a filing whether Mr. Buffett made the decision to invest in the two firms or if the decision was made by Berkshire money managers Todd Combs and Ted Weschler. The two are expected to take over all of Berkshire’s investments once Mr. Buffett is no longer in the top job.

In the early months of the pandemic, the 90-year old Mr. Buffett said he was optimistic that the American economy would recover over time from Covid-19 turmoil.

“You can bet on America, but you are going to have to be careful on how you bet,” Mr. Buffett said in May. “Simply because markets can do anything.”

The bets on Verizon and Chevron show Berkshire’s confidence in the long-term value of these traditional U.S. corporations, as well as the telecommunications and fossil fuel industries.

In 2020, Chevron had its worst year since 2016, and Verizon’s fourth-quarter profit fell after it booked higher costs and gained fewer new customers than usual.

Berkshire adjusted some of its drugmaker investments bets. The conglomerate sold off its $136 million investment in the Covid-19 vaccine maker Pfizer Inc.,PFE -0.09% while increasing stakes in the pharmaceutical brands AbbVie Inc.,ABBV -0.23% MerckMRK -1.00% & Co. and Bristol Myers Squibb Co.BMY -0.98%

The conglomerate continued to cut back from financial firms, selling off its remaining $93 million investment in JPMorgan ChaseJPM 2.41% & Co., and whittling away at its stake in Wells FargoWFC 3.76% & Co. by $1.4 billion.

Last year Berkshire Hathaway sold stakes in airlines, including United Airlines Holdings Inc.,American Airlines Group Inc.,Delta Air Lines Inc. and Southwest Airlines Co. Mr. Buffett said he thought consumer behavior regarding travel had changed for the long term.

Industry observers have been waiting for Mr. Buffett to use a large chunk of Berkshire’s more than $150 billion stockpile.

Instead, Berkshire has been spending billions on its own stock, investing $15.7 billion on buybacks alone in the first three quarters of 2020.

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Appeared in the February 17, 2021, print edition as ‘Buffett’s Berkshire Buys Stakes in Verizon, Chevron.’