"A billion here, a billion there, and pretty soon you're talking real money."
That statement was reportedly made by the late Sen. Everett Dirksen from Illinois. Using its premise, legendary investor Warren Buffett raked in some real money earlier this week.
Buffett's net worth hovers around $108 billion these days. When you're that rich, it doesn't take much to make what most people would call a fortune of a lifetime in a short period of time. We saw that happen on Monday. These three stocks just made Buffett $2.9 billion in only one day.
Image source: The Motley Fool.
1. Apple
Buffett's Berkshire Hathaway (BRK.A -0.39%) (BRK.B -0.56%) owns 915,560,382 shares of Apple (AAPL -1.32%), including shares owned by Berkshire subsidiary New England Asset Management (NEAM). That makes the tech giant Berkshire's biggest holding by far.
On Monday, Apple stock rose by 0.77%. That might not seem like much. However, because of Berkshire's massive stake, the increase resulted in a huge gain of more than $1.16 billion for the day.
Apple itself didn't have any new developments on Monday or over the weekend. The stock moved higher mainly because of overall market momentum. It also didn't hurt that Barron's published an article stating that Apple is likely to soon increase its dividend and announce additional stock buybacks.
2. Chevron
Chevron (CVX 0.01%) ranks as Berkshire's second-largest position. The conglomerate owns 167,353,771 shares of Chevron, including shares owned by NEAM.
On Monday, Chevron was one of two Buffett stocks that enjoyed a big boost from an unexpected source: Saudi Arabia announced that it will reduce its oil production by 500,000 barrels per day beginning in May. Russia also revealed over the weekend that it will extend its 500,000 barrels per day cut that was already in place through the end of the year.
Unsurprisingly, this news sent oil stocks through the roof. Chevron's shares jumped 4.2% on Monday, enough to add nearly $1.14 billion to the value of Berkshire's position in the oil giant.
3. Occidental Petroleum
It's not hard to guess what the other stock was that benefited from production cuts announced by Saudi Arabia and Russia. Shares of Occidental Petroleum (OXY 0.75%) climbed 4.4% higher on Monday. This move made Buffett and Berkshire a cool $582.2 million.
Buffett has been buying Occidental stock hand over fist. Berkshire currently owns 211,707,119 shares, enough to give it a 23.5% stake in the oil company.
Even with the aggressive purchases of Occidental, though, the stock still makes up only 4% of Berkshire's total portfolio. That's well below the 44.3% and 8.3% that Apple and Chevron, respectively, comprise.
Are these stocks smart picks to buy now?
Combined, Apple, Chevron, and Occidental added close to $2.9 billion for Berkshire on Monday. That's just a snapshot from one day, though. Are these stocks smart picks to buy now? My answer is a resounding "yes."
I think that Apple could have a big winner on its hands with its augmented reality (AR) headset that it's reportedly launching this summer. The company also could have new versions of its popular iPhone on the way in the next few years that could provide huge sales boosts, notably including a potential folding iPhone.
Chevron and Occidental will likely benefit from higher oil prices over the near term. Both companies are also invested in carbon capture and sequestration projects that should help generate longer-term revenue.
Occidental should have another probable catalyst: Buffett himself. Look for Buffett to continue scooping up more shares of the oil stock. Berkshire won regulatory approval last year to acquire up to 50% of Occidental. It's not even halfway to that level so far.
I predict that Apple, Chevron, and Occidental will make Buffett a lot more than $2.9 billion over the next few years. These three stocks could make regular investors plenty of money, too.
