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TheStreet Open House

Buffett's Wealth Takes a Big Hit

NEW YORK ( TheStreet) -- Although Warren Buffett has welcomed new investments and seen a number of changes to his company's roster, the past year has been a trying one for his personal wealth.

This week, Forbes released its list ranking the 400 richest Americans. According to the report, the Nebraska native came in second behind Microsoft (MSFT) founder and friend, Bill Gates. Buffett's $39 billion, however, marked a dramatic $6 billion drop from the previous year. The report said it was the largest decline seen from anyone on the list.

Despite Buffett's substantial losses, it was a generally profitable year for America's billionaires. Gates, for instance, watched his wealth grow by $5 billion. Mark Zuckerberg was the biggest winner this year, however, boasting a $10 billion increase. With a net worth over $17 billion, the Facebook founder has managed to land a spot in the top 20 list.

In the initial days following the release of this list, commentators and Buffett fans have been on the lookout for clues to Buffett's decline.

Berkshire Hathaway's (BRK.A) declining share price has been fingered as a major contributor to the decline. It has been a rough year for shareholders. Year to date, shares of BRK.A have tumbled over 15%, underperforming the broader S&P 500 by a comfortable margin. On Thursday, shares of BRK.A dipped below $100,000 for the first time since the opening months of 2010.

While these losses have been substantial, the pain may not be over for the Oracle of Omaha's firm as we look to the near term. During the middle of September, General Electric (GE) announced it was prepared to repurchase the preferred shares sold to Berkshire Hathaway during the depths of the financial meltdown. Mid-October is when the transaction is slated to take place. Although the $3.3 billion that General Electric will pay to Buffett in return for these shares may on the surface appear substantial, the investor has noted he is not enthusiastic about the redemption. In his annual letter to shareholders the investor noted that after companies like GE opt to reclaim their preferred stock, Berkshire Hathaway's earnings power will be "significantly reduced."

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