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Is Buffett power mad?
Billionaire investor, Warren Buffett's has poured more than USD 3.5 billion into ExxonMobil shares. What does he know that we don't? And should we be following him?
Exxon Mobil is not his first venture into energy. He also has stakes in oil and gas producer ConocoPhillips, Phillips 66, the Conocco off shoot, National OilWell Varco and Sun Cor Energy.
Saxo Bank's Head of Equity Strategy, Peter Garnry, says Buffett likes these companies because they are very capital intensive and have a lot of exposure to emerging markets.
But he warns investors to think twice before they jump on the energy bandwagon, saying: “Would you buy something that has been the winner for the last 20 years? Do you really expect it to be the winner for the next 20 years? If the industry becomes so profitable then other players will come down and push down the profit margin – that’s the real risk here in the energy sector.”
01:49 minutes
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