Is Warren Buffett Trying To Prop Up Oil? by Footnoted
For someone who isn’t exactly known for talking his book, the Oracle of Omaha is sure doing a lot of that lately. How else to explain these 8 Form 4s filed since the beginning of the year? Each of the filings disclose that Warren Buffett has been actively adding to his already hefty stake in Phillips 66.
Just to put those 8 Form 4s into perspective, in 2015, Berkshire Hathaway filed 3 Form 4s for the entire year.
A quick search of Berkshire’s 13Fs shows that it has made regular use of the “Confidential Treatment” rule that allows high-profile investors (like Buffett) from having to disclose certain positions in their routine quarterly filings for a number of months. That’s certainly what Buffett did with his investment in International Business Machines. Though the buying was done during the first quarter of 2011, a confidential treatment request made it invisible to others until this amended 13F was filed on Nov. 14, 2011. Granted, Buffett is hardly the only prominent investor to regularly take advantage of CT requests. But it certainly shows that someone at the company knows how to use disclosure rules pretty effectively to suit their purposes.
The LF Brook Absolute Return Fund lost -2.52% in the second quarter of 2021, compared to a positive performance of 7.59% for its benchmark, the MSCI Daily TR Net World Index. Year-to-date the fund has returned 4.6% compared to 11.9% for its benchmark. Q2 2021 hedge fund letters, conferences and more According to a copy Read More
Given that Phillips 66 is the subject of each of those eight filings, you have to wonder if it has something to do with Warren Buffett's attempt to do something about the sagging price of oil. On Wednesday, oil closed at under $27 a barrel, a price last seen in 2003, according to this CNBC video clip.
At the end of the third quarter, Berkshire’s 13F showed that it owned about 4.7 billion shares of Phillips 66. But over the past two weeks, they’ve bought an additional 8 million shares. The first disclosure, made on Jan. 6, showed Berkshire buying the stock at prices ranging from $79.47 to $80.18. The most recent one — filed on Tuesday — shows that the buying continued through Jan. 14. As a reminder, Form 4s must be filed within two days of the purchase.
Berkshire’s next 13F isn’t due until February 16, and that filing only covers purchases made through Dec. 31. That means that Warren Buffett
would not be required to publicly disclose these purchases until mid-May. (Correction: my buddy and Form 4 expert Ben Silverman at InsiderScore pinged me to let me know that because Berkshire’s stake in Phillips exceeded 10% as of the Nov. filing, he was required to file those Form 4s). So my interpretation that this was a voluntary disclosure was not accurate. We apologize for this mistake). So the idea that they’re being voluntarily disclosed now hardly seems like some sort of coincidence.
As we say all the time, there are no accidents in SEC filings. Everything is usually there for a reason…even if you have to read between the lines.