Mohnish Pabrai - Why Warren Buffett Keeps Buying Occidental Petroleum Oxy

*Description:*
In this video, Mohnish Pabrai shares his experiences and insights from his close friendship with Charlie Munger. Mohnish reveals that he has dinner with Charlie four or five times a year and used to play a lot of bridge with him. During one of their conversations, Charlie expressed his interest in investing in Exxon, provided the management agreed to stop capital expenditures and instead direct all cash flows to shareholders. While traditional oil companies don't operate this way, Occidental Petroleum (OXY) does.

Mohnish elaborates on why OXY is an attractive investment. Unlike other oil companies, OXY has minimal speculative drilling and generates substantial cash flows, which are then returned to shareholders through buybacks and dividends. This approach aligns with Charlie Munger's investment philosophy.

Additionally, Mohnish discusses why Berkshire Hathaway, under Warren Buffett, invested in Chevron. Chevron’s significant position in the Permian Basin, with predictable outcomes and low exploration risk, makes it a stable, coupon-clipping investment, similar to OXY. Mohnish compares these investments to US Treasuries on steroids, explaining Buffett's strategy of seeking higher returns without downside risk.

Tune in to gain valuable insights into Charlie Munger's investment mindset and the rationale behind significant investments in OXY and Chevron.

*Keywords:* Mohnish Pabrai, Charlie Munger, Warren Buffett, Occidental Petroleum, Chevron, OXY, Exxon, investment strategy, cash flows, buybacks, dividends, Permian Basin, oil industry, Berkshire Hathaway, coupon-clipping, non-exploration risk.



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