13F filings came out last week and the most notable stock purchase came from one Warren Buffett.
Buffett revealed his largest new stock acquisition in more than two years when his quarterly filing revealed Berkshire Hathaway (BRK.A) (BRK.B) had accumulated a $3.4 billion position in Exxon Mobil (XOM).
Buffett believes that oil prices are going higher in the future. His partner Charlie Munger:
“Oil is absolutely certain to become incredibly short in supply and very high priced. The imported oil is not your enemy, it’s your friend. Every barrel that you use up that comes from somebody else is a barrel of your precious oil which you’re going to need to feed your people and maintain your civilization. And what responsible people do with a Confucian ethos is suffer now to benefit themselves and their families and their countrymen later. The way to do that is to go very slow in producing domestic oil and not mind at all if we pay prices that look ruinous for foreign oil.
It’s going to get way worse later …
The oil in the ground that you’re not producing is a national treasure … It’s not at all clear that there’s any substitute [for hydrocarbons]. When the hydrocarbons are gone, I don’t think the chemists are going to be able to just mix up a vat and create more hydrocarbons. It’s conceivable that they could, I suppose, but it’s not the way to bet. We should spend no attention to these silly economists and these silly politicians that tell us to become energy independent.
Of course it is possible Warren Buffett is wrong – do you want to be on the other side of that contract ?