An Analysis Of Berkshire Hathaway's Energy Investment Skills

Berkshire Hathaway's Energy Investment Skills by AlphaBetaWorks Insights

Should Investors Follow Buffet out of XOM

Berkshire Hathaway’s year-end 2014 Form 13F showed the liquidation of the approximately $4 billion Exxon Mobil position. This sale has generated considerable discussion. Absent data on Berkshire’s Energy Sector record, the sale is uninformative; we provide this data here.

Investors typically treat all ideas of excellent managers with equal deference. This is usually a mistake – even the most skilled managers are seldom equally skilled in all areas. However, Berkshire Hathaway has excellent track record of security selection in the energy sector. Investors should take note of this particular sale.

Berkshire Hathaway’s Security Selection

The risk-adjusted return of Berkshire’s long equity portfolio, estimated from the firm’s 13F filings,...