Over the last year, the global economy has been hit hard by multiple factors that have led to a crash in the stock market. From the coronavirus disrupting supply chains to Russia invading Ukraine, many factors have created a perfect storm.
Despite all this, billionaire investors are still making money hand over fist. So, what stocks are they buying?
Warren Buffett – Occidental Petroleum
The Oracle of Omaha, Warren Buffett, is known as a value investor, and he looks for companies that are undervalued by the market and has a history of buying them when reward to risk ratios favor the upside.
So during recessions and market crashes, investors should watch closely to see what Buffett and his company Berkshire Hathaway are buying.
Amid the current market crash, Berkshire Hathaway made a significant move by purchasing 50% of oil giant Occidental Petroleum. Occidental Petroleum is one of the world’s largest oil and gas companies, with a market cap of $64 billion. Many investors now believe Berkshire Hathaway is setting itself for a full acquisition of the company.
Why Occidental Petroleum?
While the best investors can make assumptions about why Buffett is so interested in Occidental Petroleum, many look to the current state of the oil and gas market worldwide.
With the Russian invasion of Ukraine and a lack of investment in new oilfields and projects over the last five years, many critical oil-producing countries have stagnated production profiles.
This has led to a shortage of oil, which in turn has caused prices to increase. And with global economies slowly starting to reopen, the oil demand is likely to go up, which Occidental Petroleum will be able to capitalize on.
Jim Simons – Shopify
The second billionaire investor we’ll look at is Jim Simons. Simons is the founder of Renaissance Technologies, a quantitative hedge fund that uses mathematical models to make investment decisions.
He’s also a billionaire many times over, with a net worth of $24.8 billion and a proven investment track record.
During the market crash, Simons bought shares of Shopify (SHOP), a Canadian e-commerce company that provides businesses with an online platform to sell their products.
While many believed Shopify would come out of the global pandemic on a bullish trajectory due to the online shopping boom, the company’s share price took a hit when the stock market crashed.
Shopify’s share price reached an all-time high of $176 in November of 2021, and it is currently trading 83% lower than those levels.
Simons’ investment in Shopify is long-term, as he believes the company will continue to be a significant player in the e-commerce space even after the pandemic.
With more and more businesses looking to move online and stay afloat during these challenging times, Simons’s bet on Shopify is likely to pay off in the long run.
So, why does Simons have to be so bullish on the eCommerce company?
One of the seemingly critical factors in the crash in the Shopify stock was the unsustainable expectations created during the coronavirus pandemic.
With the drastic increase in eCommerce demand and Shopify being one of the leading eCommerce platforms, it’s understandable that expectations got out of hand.
It had a job hiring boom during the pandemic but has recently let go of 10% of its workforce and is focusing on its growth strategy.
The main reason investors are hopeful for Shopify is the expected growth in the eCommerce industry, and Shopify plans to maintain a key player throughout that growth. Shopify reports that eCommerce will have sales that exceed $7.3 trillion and make up 23.6% of all consumer purchases.
Steven Cohen – Crowdstrike
Steven Cohen is the third billionaire investor making a splash during the market crash.
Cohen is the founder of Point72 Asset Management, a hedge fund that manages $24 billion in assets. He’s also a billionaire, with a net worth of $17.5 billion.
During the market crash, Cohen made headlines when he bought shares of Crowdstrike (CRWD), a cybersecurity company.
While many investors were selling off their tech stocks, Cohen saw an opportunity to purchase shares of a company he believes is poised for long-term growth.
Crowdstrike’s share price reached an all-time high of $298 in November of 2021, and it is currently trading down 58%.
With the world continually shifting to online dependence, cyber attacks are at an all-time high.
Crowdstrike provides endpoint security, threat intelligence, and cyber attack response services to businesses and organizations.
It’s one of the leading companies in the cybersecurity space and utilizes artificial intelligence to stay ahead of the curve. The ease of implementation and the advanced AI strategies make Crowdstrike a unique program for mitigating cybersecurity threats.
The growth of online business transactions and dependence, coupled with the increasing cybersecurity threats, make Crowdstrike a company positioned for long-term growth. As a result, Cohen’s investment in the company during the market crash will likely pay off in future years.
Is it time to buy?
While the stock markets are in flux, there are still opportunities to be had. Billionaire investors like Warren Buffett, Jim Simons, and Steven Cohen are taking advantage of the market crash to buy shares of companies they believe are positioned for long-term growth.
All three companies mentioned throughout this article are in markets with long-term growth potential. Shopify and Crowdstrike are benefiting from the shift to online transactions and dependence, while Occidental Petroleum was seemingly hit by global economic conflicts and the coronavirus pandemic.
The market crash has created an opportunity for investors to buy shares of high-quality companies at a discount. If you’re considering adding to your portfolio, these three stocks might be worth a closer look.