Warren Buffett likes bear markets, telling CNBC in 2018, “The best chance to deploy capital is when things are going down.”

The multibillionaire puts his money where his mouth is. During the third quarter, the S&P 500 slid more than 6% after a brief rally. That was enough to put the major market index firmly in bear market territory.

Unsurprisingly, Buffett took action as the S&P fell. Here are two stocks Buffett is still buying hand over fist.

Add another billion to the pile
What’s Buffett’s biggest holding? Some might quickly respond that it’s Apple. But Apple is actually Berkshire Hathaway’s (BRK.A) (BRK.B) largest holding, not Buffett’s biggest position. The correct answer to the question is Berkshire itself.

Berkshire reported its third-quarter results over the weekend. Its quarterly filing to the U.S. Securities and Exchange Commission (SEC) revealed $1 billion in share repurchases.

Granted, the pace of stock buybacks in Q3 was slower than seen in the first half of the year. But $1 billion invested over three months certainly isn’t chump change.

It would have been surprising if Buffett and Berkshire vice chairman Charlie Munger didn’t repurchase additional shares. The two have an open authorization to buy back Berkshire stock as they see fit. Berkshire’s share price during Q3 was lower for the most part than it was during the first six months of 2022. Buying back additional shares was likely an easy decision.

Black gold, Texas tea
I’m not sure if Buffett watches reruns of The Beverly Hillbillies. However, he probably agrees with the 1960s TV show’s theme song that oil is “black gold” and “Texas tea.” Buffett has led Berkshire to load up on two oil stocks in particular this year: Chevron (CVX) and Occidental Petroleum (OXY). Thanks to Berkshire’s Q3 filing, we know that he continued to buy Occidental stock during the quarter.

Berkshire bought 17% of Occidental’s outstanding shares in the first half of the year. The company’s stake increased to more than 20% on Aug. 4.

This wasn’t a surprise at all. Berkshire and Occidental submitted regulatory filings to the SEC on Oct. 4 that showed Berkshire owned 26.8% of the oil and gas producer.

Buffett’s big bet on Occidental has already paid off nicely: The stock is up more than 150% year to date.

More buying (and selling)
Buffett certainly bought more than just Berkshire Hathaway and Occidental Petroleum in Q3. Berkshire’s Q3 filing showed a little over $66.2 billion on purchases of equity securities during the first nine months of 2022. That’s up nearly $9 billion from the amount invested during the first six months of the year.

Berkshire also did some selling of equities during the third quarter. A comparison of the company’s Q2 and Q3 filings shows that almost $5.3 billion shares were sold in Q3.

We won’t know exactly which stocks Buffett has been buying and selling until Berkshire submits its next 13F-HR filing to the SEC. However, it’s not hard to guess which stocks he’s almost certainly continuing to buy in Q4.

Berkshire’s share price has been lower during much of the fourth quarter so far than it was in Q3. Buffett and Munger thought the stock was attractively valued enough to shell out $1 billion on buybacks. It stands to reason they like Berkshire even more at a lower price.

As for Occidental, Berkshire won a thumbs-up in August from the Federal Energy Regulatory Commission to boost its ownership of the oil company to 50%. Even with the recent frenzy of buying, Berkshire still has a long way to go to reach that approved level.

Should regular investors copy Buffett by buying Berkshire and Occidental shares? It could be a smart move. Both stocks are beating the market this year (with Occidental absolutely crushing it). Berkshire and Occidental should be able to keep up their winning ways.

— Keith Speights

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Source: The Motley Fool