Warren Buffett bought this stock last week! Should I?

Warren Buffett has bought more shares Western Petroleum, according to a regulatory filing. Consequently Berkshire Hathaway now owns more than 22% of oil companies.

The filing shows that the purchases were made at prices between $59.85 and $61.90 per share. With the stock currently priced in the middle of that range, should I buy it myself?

Western Petroleum

Buffett is clearly bullish on oil prices over the long term. As well as Occidental, Berkshire has a significant stake Chevronone of the largest oil companies in the world.

A few years ago, Buffett described his investment in Occidental as a bet on two things. One is oil prices and the other is the Permean Basin.

So it seems the Oracle of Omaha thinks oil prices will stay high and US oil demand will be strong. Given the lack of investment in oil production recently, this may be true.

With the stock trading at the price Berkshire currently buys, it’s also tempting. But there are two reasons I won’t do this.

First, Buffett always insists that the truth is that other people do something not good enough reason to do so. I agree with this principle.

To buy shares in Occidental myself, I need a first-hand view of why I think it will do well. It’s not enough to think that other people – even people with good records – have a thesis.

Second, if I want to invest Warren Buffett, I think there are better ways to do this. Instead of buying shares in Occidental, I would rather buy shares of Berkshire Hathaway.

Berkshire Hathaway

Warren Buffett’s investment activities are a constant source of interest. Given the Berkshire Hathaway CEO’s track record, it’s not surprising.

But the Oracle of Omaha is notoriously secretive about what Berkshire does in the stock market. Beyond required regulations, Buffett doesn’t like to publicize what he’s doing.

As a result, I think the best way to invest like Warren Buffett is to buy shares in Berkshire Hathaway and do nothing. Thus, when Berkshire increased its stake in Occidental, my stake also increased.

More importantly, if Buffett changes his mind about the stock and decides to sell, I don’t have to wait for the news. My stock in the business went down at the same time.

Unlike Occidental, Berkshire Hathaway is company i can work on investment thesis. It consists of several strong businesses and has a culture that allows it to grow steadily over time.

The main risk with Berkshire Hathaway is that its size presents an obstacle to significant growth. But the company’s renewable energy projects offer at least one big long-term opportunity.

Investing like Warren Buffett is a good idea. But the way to do this is not by following the Oracle of Omaha into stocks – but by owning Berkshire Hathaway stock.