Warren Buffett, the legendary CEO of Berkshire Hathaway, has a remarkable track record of outperforming the S&P 500 index. Since taking the helm nearly six decades ago, he has led his company to a staggering cumulative gain of over 5,500,000% in its Class A shares. This impressive feat has earned him the nickname “Oracle of Omaha” and made him one of the most closely watched investors on Wall Street.
Despite his impressive performance, Buffett is not immune to making mistakes. His investment in Paramount Global, a legacy media stock, has not yielded the desired returns. However, investors continue to eagerly await Berkshire Hathaway’s Form 13F filings, which provide a snapshot of the company’s stock purchases and sales in the latest quarter.
Interestingly, these filings don’t always tell the full story. While Buffett has been a net seller of stocks in each of the last seven quarters, totaling almost $132 billion, he has also made selective purchases that have caught the attention of investors. For instance, he has bought over 255 million shares of Occidental Petroleum since the start of 2022.
However, the biggest beneficiary of Buffett’s investments has been Berkshire Hathaway itself. The company has repurchased its own shares for 24 consecutive quarters, with Buffett spending close to $78 billion on share buybacks over the last six years. This strategy has helped to incentivize a long-term mindset among shareholders and improve the company’s earnings per share.
But Buffett has also been quietly building a stake in another company, Chubb, a property and casualty insurer. Over the past year, he has spent around $6.5 billion on Chubb shares, making it his top purchase during this period. Chubb’s predictable and profitable business model, combined with its ability to benefit from rising interest rates, has likely attracted Buffett’s attention.
The insurance industry’s premium pricing power and ability to invest its float in interest-bearing assets make it an attractive sector for investors. Chubb’s focus on high-end home and content insurance also provides a degree of protection against economic downturns. However, with Chubb’s shares trading at a 92% premium to book value, it remains to be seen whether the company still offers good value.
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