Warren Buffett chooses the next USA stocks to bet on

Recently, the famous investor Warren Buffett made a curious choice regarding the USA stocks to keep in his portfolio. 

This curious choice, however, could bear fruit, as positive forecasts are starting to circulate about it. 

The USA stocks chosen by Warren Buffett

Buffett is the CEO of Berkshire Hathaway, which has become under his leadership one of the leading holding companies in the world in the investment sector. 

One of the stocks that Berkshire Hathaway had long held in its portfolio was that of Apple, which is the most capitalized company in the world with over 3.3 trillion dollars in market capitalization. 

In June of this year, however, Warren Buffett decided to have Berkshire Hathaway sell Apple shares to purchase another stock. 

It was Occidental Petroleum (OXY), of which Berkshire Hathaway purchased more than two and a half million shares, investing more than 150 million dollars. 

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Apple and OXY

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The most up-to-date public data says that at the end of June, Berkshire Hathaway still owned 400 million Apple shares, totaling about 88 billion dollars. 

At the same time, it owned more than 255 million shares of Occidental Petroleum, worth 14 billion dollars. 

The fact is that Berkshire Hathaway continued to scoop up OXY shares even after the initial purchase of 2.5 million shares, and despite their price dropping from $59.6 in June to $55.9 today, the overall value of the investment was growing, in light of the new purchases. 

Furthermore, it should be considered that the current price of Apple shares at $221 is close to the all-time highs, reached in July above $237, and that Berkshire Hathaway sold shortly before they indeed reached the highs. 

However, this does not change the fact that, as far as is known, the company currently still owns 400 million Apple shares, with a total value six times higher than the value of the OXY shares it holds in its portfolio. 

The stock market performance of Occidental Petroleum

The OXY stock landed on the stock market in the 1960s of the last century. However, until 2005 its price had never exceeded $30.

The all-time high was reached in 2011, above $113, that is ten years before the great bullrun of 2021. 

In fact, during that last great bullrun, it had only returned above $30, after having dropped even below $9 in 2020. 

But at that point, the run of OXY was not over, as in 2022 it returned above $60. 

It has now been two and a half years that the price of OXY shares has been fluctuating around this threshold. 

Occidental Petroleum Corporation is a U.S. oil company founded in 1920 in Texas, and it also operates in the Middle East, North Africa, and South America, as well as in the USA. 

It has a revenue that exceeds 26 billion dollars, and owns more than 75 billion dollars in assets. On the stock market, it capitalizes about 50 billion dollars, which is more than 65 times less than Apple. 

By now, its largest shareholder has become Berkshire Hathaway itself, so much so that the holding company now effectively controls the company, even without having complete ownership. 

The forecasts on USA stocks chosen by Warren Buffett

Since after the purchase of the shares by Berkshire Hathaway the price of the OXY stock on the market has fallen, there are those who have already started to consider this initiative by Warren Buffett as a failure. 

However, one must not forget that Buffett is not a speculator, but a long-term investor, so his time horizon is several years, or even decades, despite him now being well over ninety. 

Occidental Petroleum is still a prominent name among the leading oil companies in the USA, because it is a heavyweight company specialized mainly in components related to the exploration and development of oil and gas extraction plants. 

According to a recent forecast, not only could the price of OXY stock return above $65 in the short term, but in the next 12 months, it could even return above $85. 

The purchase price of Berkshire Hathaway was below $65, so if these forecasts were to come true, Warren Buffett’s choice would prove to be good. 

The price of oil

At the base of this scenario, there is also and above all the hypothesis of an increase in the price of oil. 

In a difficult moment like this, for the geopolitical balance in the Middle East, fear is spreading that the price of oil may rise further, given that Iran is a major exporter, and if it were to be involved in a war, it could be forced to significantly reduce exports, reducing the supply of oil on world markets. 

The price of WTI crude oil at the beginning of the year was $72 per barrel, but by April it had exceeded $87. 

Since then, it first dropped to $66 in the first half of September, and then it bounced back to the current $76. 

At this moment, it is not at all absurd to imagine that it could rise above $80, or even above $85, and given that two years ago it also rose above $120, due to the war between Russia and Ukraine, it is not even absurd that in the coming months or years it could rise further. 

Evidently Buffett imagines that the scenario will be this, and that a significant increase in the price of oil could also favor the growth of production and value of oil companies like Occidental Petroleum.