To The Moon

Buffett's shareholders' meeting is about to open. Continue to rub the hot spots and talk about Buffett's recent operation.

The following figure shows Berkshire's position shares disclosed by 13F. According to SEC documents, Buffett also made a big purchase of HPQ, increased position of OXY and acquired insurance company Alleghany in 2022.

Excluding some smaller investment targets, Buffett actually focused on buying three types of stocks:

First, energy enterprises such as chevron (CVX) and occidental (oxy);

Second, buy AON, Alleghany and other insurance companies;

Third, buy technology stocks such as Activision Blizzard (ATVi) and HPQ.

The operation of Activision Blizzard happened to be bought before Microsoft was about to acquire. Although Buffett strongly denied it, it is really imaginative.

At the beginning of April 2022, Buffett bought 11.13 million shares of HPQ continuously, with a cost of $400 million and a purchase price of about $35 / share.

Although the heavy position of Apple has made Buffett a lot of profits, HP's operation is still difficult to understand.

In terms of performance, HPQ's growth is far lower than that of apple and other giants such as Microsoft and Google. Only single digit P / E ratio has advantages.

However, the low price earnings ratio of HPQ is due to the poor prospect. Although the revenue growth rate in 2021 is as high as 12%, this is the dividend of electronic products brought by home office. In 2022, Bloomberg analysts expect the revenue growth rate to be only 3.3%.

Who can expect HP computers and printers to bring high growth?

Therefore, Buffett's purchase of HPQ may just find a safe place for huge cash to resist the highest inflation in the United States in 40 years.

So far, the investment yield of Activision Blizzard and HPQ is not outstanding.

Unlike Buffett's rare investment in technology stocks, buying Occidental and Chevron is in line with the consistent style of the stock god.

Occidental first appeared in Berkshire's position stocks in the fourth quarter of last year. It bought $5.3 billion for the first time.

In mid March this year, Buffett continued to increase his position in Occidental, which shows that the stock god is optimistic about energy stocks.

In addition to occidental, Chevron is also a heavy position stock of stock god. This investment began in the fourth quarter of 2020 and increased its position by 9.54 million shares in the fourth quarter of last year, with a total market value of US $4.5 billion.

These two energy stocks have contributed a lot of income to Buffett.

Due to the supply chain crisis caused by the epidemic and the crazy release of water by the Federal Reserve, the US CPI exceeded 8% in 2022, the highest inflation in 40 years:

High inflation often leads to monetary policy tightening, just as the Federal Reserve plans to raise interest rates and shrink the table wildly in 2022 to cope with high CPI.

Rapid interest rate hikes and persistent inflation will do great harm to the economy and easily lead to economic recession, just as happened in the United States in the 1970s.

At that time, the US CPI was as high as 14%.

Under the ultra - high inflation, except for the energy industry, most companies are difficult to obtain excess returns.

As an old man who experienced stagflation in the 1970s, Buffett should be deeply impressed by the surge in energy stocks.

Although energy stocks performed well in inflation, Buffett's position increase in mid March may not have good results.

As an oil stock, the rise and fall of share price generally coincide with the price of crude oil. As shown in the figure below, the trend of occidental is basically synchronized with that of Brent crude oil futures:

In March, affected by the Russian Ukrainian crisis, the price of crude oil once exceeded US $120, but the price was at an all-time high, which was difficult to maintain for a long time and had limited room for rise.

And Occidental, after removing the rise from 2000 to 2007, the overall trend is not good and is not suitable for long-term value investment. Buffett's operating probability is also held in the short term to deal with inflation.

Buffett's operation of insurance stocks is actually practicing the concept of floating deposit investment, which is mentioned again in this year's letter to shareholders.

The cost of using floating deposits for investment is negligible, and the stickiness is great. People who buy insurance will not redeem them for fear of a bear market. Such funds are very suitable for long-term value investment.

Through Buffett's operation in this year, I was deeply impressed by how to deal with inflation.

This time, we missed the opportunity to copy homework. The next time inflation is high, don't hesitate to buy energy stocks!$HP Inc(HPQ)$ $Occidental(OXY)$ $Chevron(CVX)$ $Alleghany(Y)$ $Aon PLC(AON)$