How Warren Buffett Lost $2 Billion in Two Days on Two Stocks - SavingAdvice.com Blog - Saving Advice Articles
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How Warren Buffett Lost $2 Billion in Two Days on Two Stocks

By , October 22nd, 2014 | 7 Comments »


Warren Buffett loses $2 billion on his investments in two days
Business magnate Warren Buffett has built a reputation for making solid financial investments, with many investors and experts alike watching his example and following his tips in order to form their own successful financial future. Despite his own highly successful investment track record, even what some may call an investment genius can get hit with major losses and make investing mistakes.

A good example of this is his $10.9 billion investment in IBM. While doing well initially, it’s now turned around and he has lost essentially all of the profit he had gained. Combine that with loses in Coca-Cola, which saw shares tumble in the last couple of days, and Buffett has seen his investments in these two companies fall by more than $2 billion over the past two days. Coca-Cola took a 14 percent hit in the third quarter. Buffet’s Berkshire-Hathaway owns nine percent of the company, but that is now valued at about six percent less than it was previously.

It doesn’t stop there. Buffet dumped a massive amount of his Tesco holdings despite his reputation for holding onto investments over the long term. The British retailer has admitted to overstating its profits in the first half of the year by about $400 million. Buffet is reported to have called his investment with the chain a “huge mistake” and that company admission only points to his correctness on that count.

And then there is Walmart, with shares at around “two percent cheaper than before the release of the latest guidance.” This decrease in overall value also represents a loss for Buffet, who has held stock in the company for at least nine years.

That makes his losses for the first two days of the week come to about $2 billion. While this would be a huge amount for most people, and it certainly in not an insignificant amount even to Warren Buffett, the truth is that it’s not a big enough loss to do any permanent damage to the oracle of Omaha’s wealth.  Buffett has had a 50 year career of intense capitalism.   His company – Berkshire Hathaway has grown into a giant conglomerate – making Buffett one of the wealthiest men on earth with a net worth of over $60 billion.

If you want a detailed blueprint on how Buffett built his wealth, consider getting a copy of The Snowball: Warren Buffett and the Business of Life.  It is a comprehensive review of Buffett’s career – loaded with lessons for the average investor.  The book retails for about $13 bucks in paperback – which is an excellent bargain.

(Photo courtesy of Fortune Live Media)

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Comments

  • don says:

    I wish I was in a position to lose that much in the first place. You can only lose it if you already have it.

  • bill says:

    Nobody is perfect 100% of the time. This is a temporary setback for Buffett, not the new norm.

  • George says:

    Nobody wants to say it, but it’s obvious. The man is getting old and has lost his touch. This goes to show it. It’s time to look for a new investment leader.

  • Anonymous says:

    If he didn’t sell them then he didn’t lose anything- there market values are simply lower for now.

  • JB says:

    Buffet never claimed to be an equity trader… but an investor. This article is irrelevant.

  • DH says:

    JB- on the spot. Nothing about these companies has changed except the price. Buffett does not concern himself with prices – unless it’s the price he pays for equity. Writing articles like this make it appear as if Buffett has suffered a 2 billion loss, when the reality is that the companies are still the same but quoted at a lower price. Articles like this make praise when prices go up ( regardless of the acumen behind a buying choice), and scorn those when prices fall…again , completely irrelavent.

  • Joao says:

    He may buy more at those prices…

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