Why Buffett and ConocoPhillips stay together?
Warren Buffett just admitted his major mistake in his annual letter to Berkshire's shareholders - buying a big chunk of ConocoPhiliphs (COP) when oil prices were near their peak. But Buffet has sold a lot of his stock stakes, why not ConocoPhilips?
A little bit background of Mr. Buffett and ConocoPhilips: Warren Buffett started to buy COP in the first quarter of 2006, own about 18 million shares until the first quarter of 200
8. He significantly and secretly added to COP, to about 84 million shares by the third quarter of 2008. Buffett’s cost per share with COP is averaged at about $80. Last Friday COP is closed at $37.35. GuruFocus estimated Berkshire has lost more than $3.7 billion with COP , which is more than 55%.
But, Buffett did not sell many of his ConocoPhilips stocks. In Feb. 18 2009, Berkshire Reduces J&J, P&G stakes up to 50 percent, but only sold ConocoPhillips 4 percent.
Mr. Buffett said in his annual shareholder letter that the American economic system has "worked extraordinarily well over time," and that the nation's "best days lie ahead." What I think is that he believes best days for oil and gas lie ahead.
ConocoPhilips falls to 35.13 today. Will you bet on Buffett's mistake?
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