No. of Recommendations: 11
I'm just trying to put numbers behind my gross observations. It is very complicated.Here are some numbers for your spreadsheet, if the link works:
https://substackcdn.com/image/fetch/f_auto,q_auto:...It's a running tally of Berkshire purchases of Occidental stock, by date, with an estimate of the price, by Rational Walk who occasionally posts here.
He concludes that there have been about 7 million shares purchased in June, bringing the total to 255,281,524, at an average price of $54.39, for a total gain of $1.753b on a total (share) investment of $13.886b.
I don't believe you will ever get the complete details of exactly what date all the shares were purchased on, so it would be difficult to know exactly how many dividends have been collected, but a rough approximation would be to say that the first purchase (130m shares) was in Q1, 2022, with very roughly 15m more shares every quarter since then, for 255m now. Dividends have gone from 13c to 18c to 22c now, say an average of 13+13+18+18+18+18+22+22=1.42 for the first 135m and maybe 80c on average for the more recent 120m shares, so that would be 135*1.42 + 120*0.80 = 288m. That would bring the total gains to $1.753b + 0.288b = $2.041b, for capital invested for an average of about 18 months. That would be 14.7% in 18 months, or or 1.14698^(12/18)-1 = 9.6% annualized.
It's actually much better than I thought. This does seem to contradict the fact that fair value is listed at LESS than carrying value in the annual report, so maybe I've made a mistake, either in my calculations or in my understanding of the annual report. The small difference between the Dec 31st stock price ($59.27) and the close yesterday ($61.26) plus 2 $0.22 dividendsisn't enough to explain the difference, which would be about 255m*(1.99+.44) or $620m, about 4.5%.
That said, I still like this investment, as long as you believe, like Buffett and Hollub and OPEC+, that we are heading for a tight oil market, and not, like the IEA report this week, that we will have glut of oil as demand peaks in 2029, with a boom in renewable power booms and electrification of transportation (
https://www.businesslive.co.za/bd/world/2024-06-12...).
Place your bets!
DTB
