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How do billionaires invest? And why are some investors so much more successful than others? The insights into the investments of the largest investors in the world give a hint of an explanation for these questions. Institutional investors are required to notify the U.S. Securities and Exchange Commission (SEC) of their purchases and sales of stock four times a year.

Institutional investors are investors whose investments are so large (or so frequent) that they need to run their own business. In concrete terms, such companies are then required to be transparent if they have investments of more than $100 million.

Warren Buffett, one of the largest and most successful investors, also owns such a company. His investment tips and assessments have been put on the gold scales by stock traders for decades. A look at the portfolio of the famous stock market guru, his latest changes – and what we can deduce from that.

Investing in fossil fuels continues

And in a really big way. Just last year, the leading oil companies earned more than $200 billion, a new record for many of the companies.

In the middle of taking advantage of high energy prices: Warren Buffett. The investor cut its stake in Chevron, one of the world’s largest oil companies, by 1.44 percent in the fourth quarter of 2022. Despite this, 162,975,771 Chevron stocks remain in the portfolio with a total value of more than $29 billion. It is still Berkshire Hathaway’s third largest company.

However, the cut belies Buffett’s earlier massive expansion of stocks in companies in the oil sector. He has steadily increased his stake in the American oil company Occidental Petroleum. In the first quarter of 2022, Buffett bought back, and he now owns more than 20 percent of the company — as well as the right to buy half or more of the stock. Since then, the company has grown enormously in value, not least due to the year 2022 and the high oil prices.

Occidental is the seventh largest holding in Buffett’s portfolio. “The Oracle of Omaha” struck at the most opportune moment – and continues to invest where, frugally and in the long run, the greatest profit awaits.

This is probably especially true for Occidental for two main reasons: First, the company operates in the Permian Basin of Texas — the driving force behind US oil production growth, given the higher proportion of undeveloped wells.

Second, Occidental plans to build 100 Direct Air Capture Technologies (DAC) plants by 2035: plants that capture CO₂ must be taken directly from the atmosphere. Thanks to Biden’s “Inflation Reduction Act,” which aims to reduce carbon emissions with high federal spending, Occidental has increased its plans from 70 to 100 facilities. The reason: Plants like these should get a tax credit of up to $180 per ton of carbon dioxide captured.

Cryptos are not good as a long term investment

Warren Buffett has always been considered a crypto critic. He justifies his rejection by saying that the digital currencies have “no intrinsic value”. That makes sense if you look at Buffett’s investment strategy: with Berkshire Hathaway, the investor relies on so-called value investing from day one. With the strategy, which focuses on the long term, sales or purchase decisions are primarily based on the real values ​​of a company.

Value investing thus distinguishes itself from more short-term investment strategies, which are mainly based on the news situation, the price development or the current demand for a share. In other words, value investing is looking at the stock for its original function – an interest in a real company – rather than as an object of speculation.

Charlie Munger, the 99-year-old deputy CEO of Berkshire Hathaway and longtime friend and business associate of Buffett, recently took things a step further when it comes to cryptocurrencies: They are “worthless,” “crazy,” “ridiculous,” and “unspeakable.” And, “I think the people contradicting me are idiots,” Munger recently said at a media event. And in a guest article in the Wall Street Journal, he even called for the United States to ban cryptocurrencies.

Stocks in China can get tricky

One thing hasn’t changed in 2022: Buffett’s favorite stock remains Apple. At the end of 2022, he owned $116.3 billion in Apple stock. These make up the bulk of his portfolio.

It therefore seemed only logical to many that Buffett invested heavily in an Apple supplier. Last year, he bought $4.1 billion worth of shares in chipmaker Taiwan Semiconductor (TSMC).

The big surprise came at the end of 2022: Buffett sold 85 percent of his TSMC shares. It was an unusual move for him, as he is not known for swing trading (buying stocks and then quickly selling them). Buffett has not yet commented on his decision, but as always he will at his company’s annual shareholder meeting in Berkshire Hathaway in May.

However, there is already lively speculation as to why. On the one hand, the sale of this stock could have something to do with the ever-tightening technology restrictions imposed by the Biden administration. This should strengthen domestic production, but puts pressure on export-oriented companies in China. In addition to problems such as falling demand due to inflation and still interrupted supply chains, the chip industry in particular has been feeling this pressure recently. Analysts also predict falling sales for TSMC.

On the other hand, the rapidly rising tension between the US and China – keyword spy balloons – may also have played a role. But the impending military conflict between Taiwan – which China has never recognized as an independent state – and China could also cause instability. Such tensions pose a political risk to investments in Chinese and Taiwanese equities respectively. Buffett — and perhaps other investors with him in the future — may have factored in that risk and decided not to take the stock.

In return, Buffett remained loyal to his favorite company, Apple: in the last quarter of 2022, the “Oracle of Omaha” bought more than 300,000 additional Apple shares. That makes the tech company nearly 40 percent of Buffett’s entire portfolio.

Warren Buffett’s Top Ten Holdings

The investor owns the most shares in the following companies (as of December 31, 2022) compared to his other investments: