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Warren Buffett’s company opened positions in Taiwan Semiconductor Manufacturing, Louisiana-Pacific, Jefferies

The stock market has had a rough year.

That has made it irresistible to Warren Buffett ‘s Berkshire Hathaway Inc. BRK.B -0.26%

Berkshire spent roughly $9 billion on the stock market in the third quarter, with roughly a third of that money going toward energy companies Occidental Petroleum Corp. OXY -1.41% and Chevron Corp. CVX 0.05% , according to filings.

Berkshire also opened new positions in Taiwan Semiconductor Manufacturing Co. TSM -1.40% , American building-materials manufacturer Louisiana-Pacific Corp. LPX -1.80% and Jefferies Financial Group Inc., and added to its existing stakes in Paramount Global, PARA -1.70% Celanese Corp. CE -5.03% and RH, formerly known as Restoration Hardware.

The stocks that Berkshire revealed new positions in got a boost in after-hours trading Monday.

Overall, Berkshire spent $66 billion buying stocks in the first nine months of the year. That is more than 13 times its spending over the same period in 2021.

“This is classic Buffett,” said David Kass, a finance professor at the University of Maryland’s Robert H. Smith School of Business. “He is being greedy when others are fearful and fearful when others are greedy.”

Investors got a close look at Berkshire’s investments after the market closed Monday, when the company released its latest 13F filing. The U.S. Securities and Exchange Commission requires all institutional investors that manage more than $100 million to file the form within 45 days of the end of each quarter. Because institutions must disclose their equity holdings and the size of their positions on the form, investors often view 13Fs as a way to see how large money managers have been betting on the stock market.

The three months through September were a tumultuous period, when hopes and fears around Federal Reserve policy sent stocks flying higher—then crashing. The S&P 500 in September logged its biggest monthly drop since the Covid-19 selloff of 2020.

Berkshire wound up seizing narrow windows of opportunity to buy energy stocks when they were trading down from recent highs—a move that has proved prescient, given how energy stocks have soared once again.

For instance, Occidental Petroleum climbed to $75.26 a share in August. At the time, that marked its highest price for the year.

Over the following weeks, the stock market tumbled. Berkshire waited. Then, in the final week of September, Berkshire bought nearly 6 million more Occidental shares at prices ranging from $57.91 to $61.38, according to an SEC filing.

The timing could hardly have been better. Occidental’s stock has risen above $70 a share once again.

Over the course of the third quarter, Berkshire also added to its stake in Chevron.

Energy stocks have soared in 2022, thanks to Russia’s invasion of Ukraine sending oil prices higher. Even as crude oil has retreated from its high of the year, energy stocks have continued to dominate the stock market. Analysts have viewed Berkshire’s big bets on energy as a way to benefit from inflation, which has proved to be stronger and more persistent than many anticipated.

Berkshire had about $24.4 billion of Chevron shares at the end of September, making it the company’s third-biggest stockholding.

Meanwhile, Berkshire kept large stakes in financial stocks. Bank of America Corp. BAC -1.69% and American Express Co. AXP -0.49% , for instance, made up around 17% of its equity portfolio valued at $306 billion at the end of the third quarter.

Berkshire also unloaded roughly $5.3 billion of stocks in the three months through September, according to filings.

Those sales included U.S. Bancorp, USB -2.38% a bank stock that Berkshire has been invested in since 2006. Berkshire owned roughly 53 million shares of U.S. Bancorp at the end of October, down from 145 million shares at the end of last year.

Berkshire also trimmed its position in Bank of New York Mellon Corp. and exited its position in real-estate investment trust Store Capital.

Painting is part of collection of works being sold off by foundation for CBS founder William Paley

A foundation for CBS founder William Paley has started selling off a trove of masterpieces long lent to New York’s Museum of Modern Art to fund an expansion of the museum’s digital footprint—including a Pablo Picasso that sold Monday for $37.1 million.

The sale at Sotheby’s landed a week after Christie’s made auction history selling Microsoft co-founder Paul Allen’s $1.5 billion art estate. While Mr. Allen’s art stirred up a marketing bonanza, collectors and dealers say they will be seeking clues about the market’s broader strength during these remaining sales in New York’s fall series.

While Sotheby’s evening sale on Monday totaled $392 million, one of its highest tallies, a few unsold works by artists including Edgar Degas and André Derain sapped some energy from Sotheby’s Manhattan saleroom.

Mr. Paley’s cubist Picasso from 1919, “Guitar on a Table,” was one of a couple dozen works at Sotheby’s put into MoMA’s care after the television pioneer died in 1990. The foundation said it decided to sell the art to raise roughly $70 million for several charitable causes, including helping the museum expand its digital footprint.

The yellow, pink and teal Picasso, which Mr. Paley bought as a young collector in 1946, had been expected to sell for at least $20 million. Two bidders on Monday wound up competing for it, pushing the price of the kaleidoscopic tablescape higher. A telephone bidder won the work.

Other pieces from Mr. Paley’s estate up for bid on Monday included Joan Miró’s 1949 abstract “Painting,” which sold for $1.4 million, over its $700,000 to $1 million estimate.

Last month in London, Sotheby’s helped the foundation sell Mr. Paley’s Francis Bacon from 1963, “Three Studies for Portrait of Henrietta Moraes,” for $27 million.

Monday’s sale of Piet Mondrian’s ‘Composition II’ sets a new record for the artist.

Ahead of the sale, MoMA director Glenn Lowry said the museum wants to use its proceeds to possibly launch its own art-related streaming channel and possibly team up with a university to offer degrees in art fields. “We need to increase our capacity off-site and online,” Mr. Lowry said.

Elsewhere in Sotheby’s sale, Piet Mondrian’s “Composition II” sold for $51 million, establishing a new record for the artist. The grid-like piece from 1930 was estimated to sell for around $50 million.

Sotheby’s sales on Monday also included the estate of former Whitney Museum of American Art President David Solinger. It topped $138 million and was led by a swirling 1950 untitled collage by Willem de Kooning that sold for $33.6 million.

Another Picasso, Mr. Solinger’s 1927 red-and-black view of a “Woman in an Armchair,” sold for $10 million—well under its $15 million low estimate.

Women artists continue to climb, with Sotheby’s selling Lee Krasner’s 1955 “Porcelain” for $3.7 million over its $3 million low estimate. “Portrait of Romana de la Salle,” Tamara de Lempicka’s 1928 view of the socialite in a pink gown, also sold for $14.1 million, over its $10 million low estimate.

New York’s major fall sales continue this week with additional sales by Sotheby’s, Christie’s and boutique house Phillips.

Details about what’s in the art collection of Sotheby’s owner Patrick Drahi have been revealed after hackers leaked private documents related to the French telecommunications manager.

Drahi, who has ranked on the ARTnews Top 200 Collectors list each year since 2020, has a collection that is believed to be worth around $750 million. He is known to be guarded about his business dealings and his art collecting, so little was known about the latter until now. He acquired Sotheby’s in 2019 for $3.7 billion.

Heidi News and Le Monde co-published reports on the documents and what was mentioned in them.

News of the online attack, carried out by ransom hacker group HIVE this year, first circulated in September when the French outlet Reflets reported that Drahi had been the subject of a €5 million ransom request by the group. In exchange, HIVE said it would not release any information about his art collection and his correspondence with tax advisers. Representatives for Drahi have taken action against the news outlet for publishing the emails.

According to the leaked documents, Drahi’s collection spans around 200 works, including examples by Pablo Picasso, René Magritte, Francis Bacon, Marc Chagall, Jean Dubuffet, Alberto Giacometti, and Wassily Kandinsky. An estimated 25 works were bought from Sotheby’s between 2015 and 2020.

Among the most valuable pieces in Drahi’s private holdings are Pablo Picasso’s Femme Turc au costume dans un fauteuil (1955), Amedeo Modigliani’s Portrait of Jeanne Hébuterne sitting in an armchair (1918), and Francis Bacon’s Triptych inspired by the Oresteia of Aeschyluss (1981), which are valued at between €27 million and €75.2 million. There are others by Jean Dubuffet, Gerhard Richter, Marc Chagall, Liu Ye, and Barbara Hepworth that are estimated at lower sums ranging from €1 million–€5 million.

Leaked documents also revealed information about Drahi’s financial maneuvers related to his collection last year. In October 2021, Drahi transferred ownership of his art collection between two companies in St Vincent and the Grenadines, known tax havens in the Caribbean. Those companies are named Angelheart Ltd and Forever Ltd. The move came after the European Union instated a new tax policy, ATAD2 (Anti Tax Avoidance Directive), targeting capital gain tax.

Drahi has said he does not comment on his “private life” to various outlets.

On Monday evening, two back-to-back modern art evening sales at Sotheby’s brought in a collective $391.2 million.

Even though the sales surpassed the house’s estimate of $318 million, the result failed to continue begun last week, when Christie’s kicked off the fall auction season in New York with a bang. That house had offered the collection of the late tech mogul Paul G. Allen, which raked in a staggering $1.5 billion with fees—the highest sum ever reached for a public single-owner sale.

Still, the Sotheby’s auctions minted a new record for Piet Mondrian, with a painting by him selling for $51 million.

Two historic figures from the New York art scene held some of the works offered at Sotheby’s sales on Monday night.

Paintings and sculptures from the collection of the New York attorney David Solinger, who formerly served as president of the Whitney Museum before his death in 1996, attracted attention from collectors. Kicking off the two-pronged event, the Solinger sale brought in $137.9 million.

The second sale included several owned by the New York media mogul William Paley, who died in 1990. The funds gained from these works will be put toward an endowment fund focused on digital initiatives at the Museum of Modern Art in New York, where Paley served as a longtime trustee and benefactor.

The 23-lot Solinger auction was a white-glove sale, meaning that all of the works in it sold. Many of those works achieved prices above their high estimates.

At the following 44-lot auction, just 36 works sold, with some failing to meet their low expectations. Twenty-one of those works came with third-party guarantees, minimum bids that auction houses secure in deals with outside backers to offset financial risk.

“Not every sale can be an Allen,” art adviser Wentworth Beaumont, who attended the sale in person, told ARTnews.

Conducting the two-pronged event, which saw only a few moments of fierce competition, was Sotheby’s auctioneer Olivier Barker. The usual crowd of advisors and dealers was on hand for the three-hour-long event.

Specialists speculated that tempered energy among participating clientele may suggest that the night’s focus—a largely trophy-free sector of the modern art category—is suffering a prolonged lull in demand post-Covid. “This was a sign that we are returning to reality,” said Sotheby’s contemporary art specialist Julian Dawes in a press conference following the sale. “In 2016 or 2017, this would have been a wonderful sale.”

Jean Arp’s amorphous limestone sculpture Fruit méchant (1936) started the sale with a small jolt of energy that quickly waned as other lots hit the auction block. It attracted multiple bidders and eventually hammered on a bid of $2 million, four times its low estimate of $500,000. Going to a client on the phone with Sotheby’s Americas chairman Lisa Dennison, it went for a final price of $2.4 million. Other works by Jean Dubuffet, Pierre Soulages, and Fernand Léger were among the less pricey items which outpaced a estimates ranging between $1.5 million to $2 million.

But Solinger was known for buying works by postwar New York artists whom he cultivated as friends before their respective rises to art world fame, and it was these pieces which highlighted this first auction. One of them was by Willem de Kooning, whose 1950 abstraction Collage was this sale’s top lot. Sotheby’s New York contemporary specialist Bame Fierro placed the winning bid of $29 million for the painting. After fees, that number rose to $33.6 million.

The second-most expensive work was a hand-painted Giacometti sculpture cast in 1948. Titled Trois hommes qui marchent (grand plateau), it features a cluster of three of the artist’s signature walking man figures, and was won on a bid of $25 million, against an estimate of $15 million. Commissioned by Solinger after he met the artist at the latter’s Paris studio, the work went to a bidder in the room who prevailed over another competing buyer on the phone with Sotheby’s Asia chairman Jen Sua after a seven-minute battle. With fees, it was bought for $30.2 million.

A mobile sculpture by Alexander Calder and a painting by Joan Miro also saw bids placed by buyers based in Asia. Calder’s all-black mobile Sixteen Black with a Loop (1959) fetched a final price of $8.4 million with fees, more than doubling its $3 million low estimate.

Though new artist records were not the focus of Monday’s night’s achievements, one for the Dutch modernist Piet Mondrian, the subject of a recently released biography and a retrospective at the Fondation Beyeler in Riehen, Switzerland, seemed overdue. Leading the second portion of the night, Mondrian’s Composition No. II, a 1930 multicolored grid deriving from the artist’s signature abstract geometric paintings, hammered on a bid of $48 million, going to an Asian bidder. It sold for a record-breaking $51 million with buyer’s fees.

The result only just barely surpassed the artist’s previous auction record of $50.6 million, set in 2015 when his 1929 Composition No. III, With Red, Blue, Yellow and Black sold at Christie’s New York. Composition No. II had last appeared at auction in 1983, when a Japanese collector bought it for $2.2 million.

Five works that had been on long-term loan to the Museum of Modern Art in New York, given as part of a posthumous agreement with Paley’s charitable foundation, were sold in the second portion of the night.

The most valuable of the five hailing from the Paley loan was Pablo Picasso’s 1919 Cubist still life Guitare sur une table, which hammered at $32 million, going to a bidder on the phone with Sotheby’s New York business development representative Brad Bentoff. It went for a final price of $37 million with fees, surpassing its $25 million expectation, which had been designated as an estimate upon request by the auction house’s specialists ahead of the sale.

Another top earner was a black sculpture of a reclining figure from 1951 by Henry Moore that sold for $26 million with fees. That price may be high compared to other lots in this sale, but it was not an impressive result—the piece failed to reach its $30 million estimate.

Elsewhere in the sale, works by Henri Rousseau, Joan Miro, Pierre Bonnard, and August Rodin sold for prices between $1.4 million and $4.6 million.

The grouping fetched a collective $47 million, about $10 million more than the house estimated that it would bring in.

There was one plus to the modest bidding: the sales ended relatively quickly. “Report on that, Sotheby’s gets everyone home at a reasonable time,” Barker said.

Benjamin Cercio joins the Italian luxury house on Monday.

MILAN — Gucci continues to make strategic hires to ramp up its internal divisions.

In its latest move, the Italian luxury powerhouse named Benjamin Cercio global communications director, starting Monday. He will report to Susan Chokachi, Gucci’s executive vice president, chief brand and client officer.

Cercio will be responsible for all brand communications globally overseeing PR activities, special events, social media and influencer marketing, as well as art projects, exhibitions and communications for the Gucci Garden and Gucci Archive.

His position was most recently held by Beniamino Marini until last July, when he took on the role of digital content and arts brand image director at Gucci.

Cercio comes to Gucci from Louis Vuitton, where he rose up the ladder over a career of more than 16 years, most recently serving as international director of press, influencer and entertainment, according to his LinkedIn page.

The appointment is part of broader C-suite changes at Gucci.

As reported, Robert Triefus took on the role of chief executive officer of Gucci Vault and Metaverse Ventures this month, in addition to his new position as senior executive vice president, corporate and brand strategy. Previously he was executive vice president, brand and client engagement.

That position was taken over on Sept. 1 by Chokachi, previously president and CEO of Gucci Americas, while Federico Turconi, who was executive vice president and chief operating officer of Gucci Americas, assumed Chokachi’s role.

Bottleneck in sourcing metals for batteries is prompting companies to bypass traditional supply chains

In the 1920s Henry Ford set up rubber plantations in the Amazon, a steel mill in Michigan and coal mines across the US to supply his growing automotive empire. A century later, car groups are again looking to take greater control of their raw material supply chains in the race to electrify the global car fleet.

Demand for electric cars is taking off but the bottleneck of raw materials for batteries such as lithium, nickel and cobalt is threatening to slam the brakes on their rollout — a problem that could lead to factory shutdowns and land carmakers with billion-dollar fines for missing emissions targets.

“We’re absolutely convinced that this is a race, a zero-sum game and resources are a finite limit,” Tanya Skilton, director of purchasing for electric vehicle critical materials at General Motors, told the FT Mining Summit last month.

The International Energy Agency forecasts that soaring EV battery demand will require 50 new lithium projects, 60 nickel mines and 17 cobalt developments by 2030, a huge challenge for an industry that typically takes 15 years or more to develop a project.

The threat to carmakers has led to a shift in attitude towards the mining sector and a realisation the motor industry can no longer approach sourcing raw materials as off-the-shelf procurement.

Mercedes-Benz is among car companies to have signed offtake agreements — promises to buy future output that help suppliers raise financing — with miners, and has begun work on its own processing facilities.

“If you asked me five years ago, I would have said this was the job of the commodity markets,” said the German group’s chief executive Ola Källenius, adding that it now “makes sense” to do direct deals because of the coming squeeze.

“If you do the maths of what we would need at the end of the decade, and you see where we are now, it’s a factor of X in terms of scaling,” he said. “The issue is not that there’s not enough lithium on this planet — there is. “But it needs to be mined and it needs to be refined and go through all the steps.”

Skilton forecasts that the industry will be divided into winners and losers based on which companies will have the minerals to fulfil their “electrified dreams”.

The change marks a reversal of a decades-old practice under which carmakers manage their direct suppliers, which in turn work with tier-two suppliers, and so on down the chain, with each business dealing only with the company that feeds directly into them. In the EV supply chain, battery producers, cathode manufacturers and mineral processors sit between the car companies and miners.

Now carmakers are going right down the chain to the mines themselves, both to secure the supplies cheaply and to ensure ethical and emissions standards are met. Stellantis, owner of the Peugeot and Fiat brands, and GM are among those that have invested in early-stage mining companies in an attempt to secure resources.

“The carmakers have woken up to this,” said Doug Johnson-Poensgen, chief executive of Circulor, a technology group that uses a distributed database to track parts and material through the supply chain. “That’s why quite a number of the auto groups have direct supply deals.”

Chinese EV companies have been pursuing this strategy for some time. BYD, the world’s largest EV producer, has been trying to secure access to lithium mines in Africa and Chile. The world’s largest battery maker CATL agreed last month to buy a near 25 per cent stake in cobalt producer CMOC for about $3.7bn.

Tesla has been the most aggressive western carmaker in signalling it will become directly involved in the mining and processing of critical raw materials when the supply chain is unable to meet its needs.

The company held talks with Glencore about taking a stake in the Swiss commodities group, although Tesla’s chief executive Elon Musk has denied his company contemplated such a move. Two people familiar with Musk’s thinking said he would prefer the carmaker to develop in-house capabilities, disliked giving away capital without having operational control and was concerned about the heightened scrutiny a Tesla-backed mining project would face.

Musk told the Financial Times’s Future of the Car Summit this year that the company would only invest in mines if “we think we can change that mining company’s trajectory significantly”.

Tesla is pushing ahead with plans to build a lithium refinery on the Gulf coast in Texas with equipment set to arrive next year, according to a person familiar with the project.

Some of the feedstock for the refinery was supposed to come from Piedmont Lithium’s project in North Carolina, but the Australian mining group delayed delivery indefinitely last year after falling behind with permitting applications. That reflects a broader lament among mining executives who say permitting has become tougher, pushing mine development timeframes from five to seven years a few decades ago to well over 10 years now.

Lithium is particularly problematic. Prices have surged ninefold in less than two years to $74,500 per tonne of battery-grade material. The industry is still maturing and lacks experience in scaling up production quickly.

To meet the forecast increase in demand for EVs, the lithium industry is relying on early-stage mining companies, often with unproven technologies, to deliver every single tonne of supply promised.

GM’s Skilton said new entrants could unlock resources sooner or in cleaner ways. But she recognised the risk “that the tonnes will show up on a different timescale to what we want them to”.

Eric Norris, president of lithium at the world’s highest-valued producer and key Tesla supplier Albemarle, said securing sufficient quantities of hard rock containing the metal to feed into the lithium refinery would be the key challenge for Musk’s company, which aims to sell 20mn electric vehicles a year by 2030.

“The bottom line is they need resources to execute their strategy,” he said. “They may have a few deals here and there but they will amount to a small fraction of what their growth aspirations are. I think they need the industry and companies with access to these large world-class resources to drive their agenda.”

Large mining groups diverge significantly from early-stage developers on the need to go beyond the traditional model of offtake agreements to have supply delivered when needed.

“We need to raise a lot of money,” said Keith Phillips, chief executive of Piedmont Lithium, adding that $600mn was required for a lithium refinery in Tennessee and approximately $1bn for a proposed mine and refinery in North Carolina. “The best way for us to do that and for the auto and battery companies to secure their supply is to co-invest with us.”

By contrast, Norris said Albemarle generated “significant cash flow” to fund future growth and had no need for funds from carmakers. It would only explore investment from a car company if there were strategic benefits such as helping it innovate more rapidly, develop new products or expand its recycling business, he added.

An executive at another large producer of battery metals also said “we don’t need a carmaker to hold our hand” for any assets it wanted to develop.

The interests of mining and automotive companies are fundamentally at loggerheads — miners want the higher prices that come with limited supply and car companies want low prices with ample availability. More practically, the multi-decade investment horizon for the mining industry is a far cry from the shorter cycles on which carmakers operate.

Henk de Hoop, chief executive of battery metal consultancy SFA, said the rationale for a car company to take a stake in a large miner was unclear. “If you invest in a Rio Tinto or Anglo American, then it’s a regulated shareholder relationship so it doesn’t give you a right to 20 per cent of the nickel or other metals,” he said.

Instead of the full-blooded conglomerate model of Ford a century ago, according to de Hoop, the carmakers’ strategies bring them closer to behaving somewhat like a bank or Japanese trading house.

“They are acting far more like alternative capital providers to accelerate projects deemed too risky by traditional lenders, while gaining supply security as compensation,” he said.

French insurer was biggest private contributor to rights issue and wants improved terms on joint venture

Axa, the biggest private backer of Monte dei Paschi di Siena’s rights issue last month, is in talks to secure more lucrative insurance commissions from the Italian bank.

Last month the French insurer agreed to sub-underwrite €200mn of the €900mn offered to private investors, providing a lifeline to MPS as it tried to plug a capital shortfall though its seventh rights issue in 14 years.

Many investors had shunned the deal because of MPS’s dire record: a series of scandals, government bailouts and high profile court cases. The Italian government, which rescued the bank in 2017 and still holds a 64 per cent stake, contributed €1.6bn of the overall €2.5bn capital raise.

Axa, which has lost about €1bn on MPS equity investments over the past 15 years, nonetheless stepped up.

According to people close to the matter, Axa is negotiating a fresh deal with MPS over a joint venture in which the Italian bank’s commercial network distributes a range of life and damage insurance policies.

The negotiations are likely to yield more lucrative commission fees for Axa and potentially extend the arrangement beyond its current term of 2027, according to these people. Under Italian financial regulation, a formal statement must be issued only once the terms of the agreement are formally revised. This will “probably happen next year”, the people said.

Axa notified Italy’s financial regulator, Consob, before the rights issue was launched that it had activated its “related parties transactions committee”. Under Italian rules, the procedure must be activated when parties involved in any form of negotiations are related to each other through an investment, shareholding, or other economic interests.

Axa said: “There has been no change in our relationship with MPS, no commitment, no amendment to our agreements.”

The insurer declined to comment on the formal activation of the “related parties transactions committee” and the notification to the Italian financial regulator.

MPS and Consob declined to comment.

The capital increase has already attracted concern in Brussels over potential illegal state aid after a pool of banks underwriting the capital increase were offered unusually high fees in exchange for their backing.

Under EU rules, the state can only take part if all investors — public and private — are subject to the same conditions.

Earlier this month, MPS said overall take-up had been 96.3 per cent, including the Italian treasury’s contribution, and the underwriters, which include Bank of America, Citigroup, Mediobanca and Credit Suisse, that received a €125mn fee in exchange for their backing, will be left holding just €93mn.

Beyond the taxpayers and Axa other backers of the rights issue include MPS commercial partners such as payments provider Nexi and Italian asset manager Anima, junior bondholders, Italian banking foundations and a few pension funds directly controlled by the Italian treasury.

Over the summer, MPS and Anima began discussing an amendment to the terms of their existing commercial partnership. The Milan-based asset manager publicly said it was considering a contribution of up to €300mn to the rights issue in exchange for an improvement in the economic conditions of their partnership. It ultimately contributed just €25mn after negotiations broke down and Anima said it had opted for a “merely financial investment”.