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The last time the stock market threw a proper tantrum, Warren Buffett went on a shopping spree. In fact, with a record $68bn invested through Berkshire Hathaway during 2022, it was the most active the billionaire investor had been since the 2008 financial crisis.
The result? Buffett and his team added close to $300bn to Berkshire’s market-cap, pushing the investment vehicle into trillion-dollar territory. And by following in their footsteps during the next downturn, investors could unlock substantial wealth within a few short years.
Investing with Buffett’s methodology
In 2026, the stock market as a whole hasn’t stumbled yet. While certain sectors like tech have certainly been hit with sell-offs, most of that money hasn’t actually left the stock market. Rather, it’s been rotated into other sectors like energy and defence.
Nevertheless, with geopolitical and trade uncertainty continuously escalating and the stock market still at record-high valuations, the stage is potentially set for a painful sell-off.
That’s likely why Buffett’s spent the last two years building a massive cash position, patiently waiting for more lucrative buying opportunities. And while Greg Abel is now CEO at Berkshire with Buffett in the chairman’s seat, Berkshire continues to follow the exact same playbook.
With over $350bn of cash sat on the balance sheet, the investment group has a huge amount of ammunition for a future buying spree. And it might be wise for investors to think about building their own cash position in case the worst does come to pass.
But let’s assume the markets collapse tomorrow. Which stocks are on Berkshire’s radar?
Capitalising on volatility
The most obvious stock Berkshire would potentially buy during a 2026 stock market crash is Occidental Petroleum (NYSE:OXY).
Since the 2022 correction, Buffett and his team have been continually adding more and more shares to the Berkshire portfolio. So much so that he actually owns over 30% of the entire business.
As one of the most acreage-rich operators within the Permian Basin, the company generates a relatively low $38 per barrel of breakeven production cost (WTI Crude). But when throwing in the added cash outflows from capital expenditures, the breakeven oil price is actually closer to $51 per barrel of oil & equivalents.
Critically, the firm generates an estimated $240m per $1 above this $51 breakeven threshold, turning it into a cash-generating machine when prices soar. And following the war in Iran, WTI Crude is now trading at around $92 per barrel – enough to generate a very rough $9.84bn in free cash flow.
So if the share price drops but oil prices remain high, Occidental’s likely to be near the top of the shopping list.
What to watch
While higher oil prices open the door to exception cash returns, the opposite is also true. A swift resolution to the Iran conflict or a softening of demand could see oil prices fall sharply.
Even if prices remain elevated for longer, Occidental’s balance sheet is still fairly leveraged. As such, management may be forced to prioritise debt reduction over reinvestment, potentially creating opportunities for its rivals.
Nevertheless, with impressive production capacity and Berkshire already owning a sizeable stake, there’s clearly something Buffett likes about this business. And that’s definitely worth investigating further, in my opinion.
