Warren Buffett’s Top Plays: #21 Exxon

Warren Buffett, through Berkshire Hathaway, bought a nearly 1% stake in Exxon in 1984 for $173 million, which represented 12% of his then net worth of around $680 million. The stock was cheap at the time, with a PE of 7. The shares were sold in 1985, resulting in a return of around 30%. There is no information available as to why Buffett invested in the oil company, but it could have been a bet on oil prices which had dropped from $38 in 1979 to $28 in 1984. However, the prices dropped further to $10 in 1986. Despite his reputation as a long-term investor, Buffett sometimes makes short term moves. He made a similar investment in 2013 in the merged Exxon Mobil, but this trade was less significant as his net worth had increased almost 100-fold since 1984.