Liberty Formula One: Riding the F1 Resurgence

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  Published in Stocks and Investing on Thursday, January 8th 2026 at 21:03 GMT by 24/7 Wall St.
      Locale: UNITED STATES

Liberty Formula One: Capitalizing on a Global Phenomenon

Berkshire Hathaway's surprising foray into the world of motorsport with its acquisition of 2.8 million shares of Liberty Formula One (LFW) in late 2023 sparked considerable discussion. While a departure from traditional Buffett investments, this move demonstrates a willingness to adapt to evolving entertainment and consumer trends. Formula One racing isn't merely a sport; it's a global entertainment brand experiencing a resurgence in popularity, particularly in key markets like the United States. The recent surge in viewership, fueled by popular documentaries like Drive to Survive on Netflix, has significantly boosted revenue. Liberty Formula One controls the commercial rights to the sport, effectively positioning it to benefit from this heightened interest. The 34% revenue increase reported in the last quarter isn't a blip; it suggests a sustained growth trajectory. Furthermore, the brand's expansion into new territories and innovative marketing strategies indicate a commitment to long-term value creation.

Currently trading around $37 per share, LFW offers accessibility for investors with limited capital. A $1,000 investment would secure approximately 27 shares, providing exposure to a rapidly expanding global entertainment empire. However, it's important to note that entertainment stocks can be sensitive to economic downturns and shifts in consumer preference, requiring ongoing monitoring.

Occidental Petroleum: Energy and a Green Future

Occidental Petroleum (OXY) represents a more traditional Buffett investment. Berkshire Hathaway's substantial stake - nearly 20% of the company - and continued accumulation of shares demonstrate strong confidence in Occidental's long-term prospects. The primary driver behind this investment is, unsurprisingly, the demand for energy. Occidental is a major player in the oil and gas industry, and rising energy prices directly translate to increased profitability. However, what sets Occidental apart is its commitment to carbon capture and storage (CCS) technology. Buffett has repeatedly emphasized the importance of investing in companies addressing climate change, and Occidental's CCS initiatives align with this philosophy. CCS has the potential to become a lucrative growth area as the world seeks solutions to reduce carbon emissions. While still in its early stages, Occidental's investment in CCS positions it as a leader in a potentially transformative industry.

With shares priced around $60, a $1,000 investment yields approximately 17 shares. While the oil and gas sector is subject to cyclical fluctuations and regulatory changes, Occidental's diversification into CCS provides a degree of resilience and long-term growth potential.

DaVita: Addressing a Growing Healthcare Need

DaVita (DVA) is a long-held Berkshire Hathaway position, indicating a belief in its enduring value. As a leading provider of kidney care services, DaVita operates dialysis centers and offers related treatments. The demand for these services is driven by two major demographic trends: the aging population and the increasing prevalence of diabetes. Both factors contribute to a rise in kidney disease, ensuring a consistent and growing demand for DaVita's services. While DaVita has experienced periods of volatility, its essential healthcare nature offers a degree of stability.

At approximately $25 per share, a $1,000 investment buys around 40 shares. Healthcare stocks are generally considered defensive investments, less susceptible to economic downturns, making DaVita a potentially valuable addition to a diversified portfolio. However, the healthcare industry is subject to regulatory scrutiny and reimbursement challenges, requiring careful consideration.

Beyond the Stocks: The Buffett Philosophy

Investing in these three stocks isn't simply about following a checklist. It's about understanding the underlying principles that guide Warren Buffett's investment decisions. He prioritizes companies with strong fundamentals, sustainable competitive advantages, and capable management teams. He favors businesses he understands and avoids complex or speculative ventures. By analyzing these three picks, investors can gain insight into Buffett's evolving strategy and apply these principles to their own investment choices.