https://www.wsj.com/articles/warren-buffett-says-markets-have-become-a-gambling-parlor-11651340230?mod=hp_lead_pos2
“It’s a playing parlor,” Mr. Buffett mentioned Saturday of the markets over the previous few years. He added that he blamed the monetary trade for motivating dangerous habits amongst buyers. Whereas he finds speculative bets “obscene,” the pickup in volatility throughout the markets has had one good impact, he mentioned: It has allowed Berkshire to seek out undervalued companies to spend money on once more following a interval of relative quiet.
Up till lately, Berkshire had largely been sitting on its money pile. Its enterprise thrived; a recovering financial system and roaring inventory market helped push internet earnings to a report in 2021. But it surely didn’t announce any main offers, one thing that led many analysts and buyers to marvel about its subsequent strikes. Berkshire ended the yr with a close to report amount of money readily available. (After Berkshire’s shopping for spree, the dimensions of the corporate’s battle chest shrank to $106.26 billion on the finish of the primary quarter, from $146.72 billion three months earlier.)
Mr. Buffett’s feeling that there have been no interesting funding alternatives for Berkshire shortly gave method to pleasure in late February, he mentioned Saturday, when he received a replica of Alleghany Chief Govt Joseph Brandon’s annual report.
Berkshire’s determination to construct up a 14% stake in Occidental additionally happened with a report. Mr. Buffett mentioned he had learn an analyst word on the corporate, whose inventory remains to be buying and selling beneath its 2011 excessive, and determined the casino-like market circumstances made it a great time to purchase the inventory.
“I don’t assume we ever had something fairly like we’ve now when it comes to the volumes of pure playing exercise occurring each day,” Mr. Munger mentioned. “It’s not fairly.”
However the quantity of hypothesis within the markets has given Berkshire an opportunity to identify undervalued companies, Mr. Munger mentioned, permitting the corporate to place its $106 billion money reserve to work.
Neither Mr. Buffett nor Mr. Munger particularly addressed Berkshire’s determination to extend its Chevron stake.
However the two males supplied a protection of the oil trade. It’s a good factor for the U.S. to be producing extra of its personal oil, Mr. Buffett mentioned. Mr. Munger went additional, saying he might hardly consider a extra helpful trade.
Personally I am undecided what made OXY or CVX a lot extra interesting this yr than final yr or the yr earlier than, once they have been promoting for a lot much less.
