Warren Buffett's letter to Berkshire Hathaway shareholders about the company's 2021 performance was released this weekend. To me the most newsworthy aspect of it is that while philanthropies such as the Ford Foundation are ostentatiously divesting from fossil fuels, Buffett is buying. The table in the letter listing Berkshire's 15 largest equity holdings as of December 31, 2021 includes a stake in Chevron worth about $4.5 billion and an investment in Occidental Petroleum valued at about $10.7 billion. Berkshire also owns a 38.6 percent stake in Pilot Corp., and the letter says that "early in 2023, Berkshire will purchase an additional interest in Pilot that will raise our ownership to 80 percent." The Buffett letter describes Pilot as "a leader in travel centers," but that is a euphemism. The Pilot Flying J website says "Pilot Company has grown its network to more than 800 retail and fueling locations and as the third largest tanker fleet in North America, supplies more than 12 billion gallons of fuel per year."
Will the philanthropies and university endowments that patted themselves on the back for divesting from fossil fuels also sell their Berkshire Hathaway stock? Don't hold your breath. In the meantime, leave it to Buffett to scoop up valuable businesses that other investors are unloading for non-economic reasons. People make the case that long-term, fossil fuels will be replaced by other sources of energy ("electric cars," wind, solar, whatever) so therefore these companies are not great long term investments. But that's a classic Buffett value-investing "cigar stub"—discarded, but still good for a few puffs.
