Warren Buffett's Most Contrarian Bet You Never Heard Of
Buffett's $1 billion PetroChina investment in 2003 returned 800% in 4 years — here's what it teaches us about his real strategy.
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Most investors know Warren Buffett for his Coca-Cola and Apple investments. But his most contrarian bet — and highest % return — came from an unlikely source: PetroChina in 2003.
The PetroChina Case Study
In 2003, Buffett invested $1 billion in PetroChina at around $1.50/share when most investors avoided Chinese stocks. He sold in 2007 at ~$12/share — an 800% return in 4 years. The key insight? PetroChina traded at 3x earnings while Exxon traded at 13x, yet both had similar returns on equity.
Buffett's Core Philosophy
Buffett focuses on businesses with:
- High returns on capital (~20%+)
- Durable competitive advantages
- Capable management
- Available at fair prices
His recent moves suggest a shift toward capital-intensive businesses like OXY and CVX, which critics argue breaks his own 'buy simple businesses' rule.
Current Portfolio Breakdown
| Ticker | % of Portfolio | ROE | P/E | Sector |
|---|---|---|---|---|
| AAPL | ~45% | ~150% | ~28 | Tech |
| BAC | ~10% | ~11% | ~10 | Financials |
| KO | ~7% | ~40% | ~25 | Consumer Staples |
| AXP | ~4% | ~30% | ~15 | Financials |
| OXY | ~4% | ~50% | ~12 | Energy |
What Would Buffett Buy Today?
Based on his recent filings, Buffett likely favors:
- Cash-generative businesses with pricing power
- Companies trading below intrinsic value
- Management teams that allocate capital wisely
He's been adding to OXY and Japanese trading houses while trimming BYD and TSM. The risk? His massive size limits opportunities.
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Frequently Asked Questions
No. AAPL is now ~45% of Berkshire's portfolio. The key is buying tech he understands at reasonable prices.
