Berkshire Hathaway’s Big Bet On Oil: Time To Follow Suit?

While my jaw drops further filling up the car’s tank with each weekend, there’s one opportunist profiteer striking deals in the background — Berkshire Hathaway (NYSE: BRK.B).

Only a fortnight ago, Warren Buffett said there was nothing he could find that he wanted to buy. Well, it seems he, or someone else over at Berkshire at least, has had a change of heart.

Does Berkshire know something we don’t?

The company added $1.5 billion worth of shares to its Occidental Petroleum (NYSE: OXY) stake last week, now totaling $6.5 billion — two weeks ago, it owned less than $2 billion in shares. Berkshire’s not the only one shifting the balance either — several analysts have predicted energy will outperform the S&P 500 this year.

With the buzz encircling energy stocks, it’s easy to get caught up in the bonanza, thinking it’s time you got exposure. What’s important, however, is to not get enraptured in an industry if it’s not your forte. Price volatility is a significant risk with oil stocks, so if this collective wasn’t on your radar until recently, it’s probably best not to go too wild.

True investment theses rely on conviction and years of practicing patience — so think twice before cutting off your winners or long-term picks. This isn’t to say you should blacklist oil or energy, but investors should stick to their original strategy.

The next best option? A stake in Berkshire Hathaway, perhaps. While the S&P 500 is down almost 12% year-to-date (YTD), Buffett’s darling is up 9%. Maybe not the tech guru we want, but if you’re looking for someone to sail your investment through the storm that is a down market, there isn’t a better captain out there.