Warren Buffett is at it again, and the financial world is buzzing. He’s investing $35 billion right into a renewable energy initiative that is still “yet to be proven.” What’s surprising is that the famously cautious investor is doubling down on fossil fuels at the identical time.
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We’re not talking pennies here. Chevron is one among the largest holdings in Berkshire Hathaway’s portfolio – almost $19.1 billion. Buffett made his move throughout the 2020 energy downturn. Although he trimmed his position barely this yr, he stays heavily invested. Chevron’s not buying the “fossil fuels are fading” narrative. They’ve cranked up oil and gas production by 12% and are diving into major projects within the Gulf of Mexico and Israel.
But hold on, there’s more. Buffett’s got his eye on Occidental Petroleum too. His stake? Near $15.7 billion. He’s been gobbling up shares like they are going out of favor. He’s even stated that Occidental is one among the few stocks Berkshire would consider holding indefinitely. Under CEO Vicki Hollub, Occidental’s making moves, like a $12 billion deal to amass Crownrock, one other oil and gas player.
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So, why’s Buffett all in on fossil fuels when everyone else is running the opposite way? It’s all about Carbon capture technology. Each Chevron and Occidental are investing heavily on this area. Hollub has even suggested that if carbon capture proves successful, “there’s no reason not to provide oil and gas eternally.”
Buffett acknowledges the danger, stating that the “economic feasibility of this system has yet to be proven.” Nonetheless, Buffett has made dangerous bets before, they usually’ve often paid off. He’s betting that Chevron and Occidental’s investments in carbon capture will sustain the oil and gas industry, whilst the world shifts toward renewables.
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Buffett is not only focused on short-term gains; he’s taking a look at the long-term potential, particularly with carbon capture technology. If successful, this might transform the industry, making fossil fuels cleaner and more sustainable. That is why he’s willing to place a lot on the road. Buffett has seen industries change before, and he’s positioning himself to be ahead of the curve once more.
In a world where many are following the group, Buffett is doing what he does best: going against the grain. Will this gamble repay? Only time will tell. But when history is any guide, the “Oracle of Omaha” might just be onto something big again.
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This text Warren Buffett’s Quiet Power Move: Why He’s Betting $35 Billion On A ‘Yet To Be Proven’ Renewable Energy Solution originally appeared on Benzinga.com
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