In the last article I wrote here, I speculated that Buffett might be currently purchasing shares of ExxonMobil when I noted that the current price of the stock is only 3-4% higher than where it was when Buffett purchased 0.9% of the entire company last year. I connected the bridge when I said that surely the actual internal value of what the company should be worth has at least increased by 3-4% over that time.
A thoughtful reader challenged that assertion, effectively saying—hey, we don’t have clear evidence that Exxon is actually doing better this year compared to last. He noted that Exxon made $2.10 in the first quarter of this year, and made $2.12 in the first quarter of last year. Then he noted that the $2.05 per share that Exxon reported in profits during the second quarter had been artificially boosted because Exxon sold some assets in countries that define due process as “pay us kickbacks or we’ll nationalize your assets”, so the real figure should be somewhat lower. Last year, Exxon made $1.55 in the second quarter.