NEW YORK (TheStreet) -- When Warren Buffett buys a stock, the price naturally rises.
In early-morning action, on the news that "The Oracle of Omaha" recently purchased 40 million shares of Exxon Mobil (XOM) for $3.1 billion, the stock is on fire. The Exxon Mobil buy was not Buffett's first array into Big Oil investing, and it will not likely be his last. This is due to there being no industry better situated to profit from growth in Asia than the energy sector.
At present, Buffett, considered by many to be the best investor ever, has major positions in Suncor Energy (SU) and ConocoPhillips (COP). Due to the "Buffett Effect," the shares of each surged after that news became public. Over the last six months of market action, Suncor is up nearly 15%. For the same period, the share price of ConocoPhillips increased by more than 20%. But shares of Exxon Mobil rose by less than 3% for the same time segment; the major exchange-traded fund for oil, United States Oil (USO), was down slightly.
Buffett also did well investing in PetroChina (PTR), the major Chinese oil company. In 2002 and 2003, 1.3% of the shares were purchased by his Berkshire Hathaway (BRK.A) for $408 million. The shares were sold at a realized cost basis of $4 billion in 2008. A gain of 800% with a profit of $3.6 billion was realized. About that deal, Buffett lamented that he probably sold too soon.