NEW YORK (TheStreet) -- With a nickname like "the Oracle of Omaha," it is possible to forget that Warren Buffett has made his fair share of mistakes during his multi-decade investing career. In this year's Berkshire Hathaway (BRK.A) letter to shareholders, however, the billionaire investor took time to present some of his most recent flubs, reminding investors, fans, and market commentators that not even the most famous and successful of investors are immune to the market's challenges.
Given his success and charisma, it is not surprising that Buffett's highlights are well documented. In addition to his successes, though, fans and followers also keep close tabs on the investor's slip-ups. For example, many are well aware of the investor's past troubles with the airline industry. Although he has managed to successfully turn around NetJets in recent years, the staggering loss he was forced to write off from his bad bet on U.S. Airways remains a smudge on his record.
Energy is another industry the investor has struggled with in the past. While he has long maintained exposure to oil and gas companies, Warren Buffett famously doubled down in 2008 on ConocoPhillips (COP) just as oil prices were peaking. The bet quickly went sour as crude prices crumbled, leading to a more than $1 billion loss. In the years following this bad bet, the investor has dramatically pared back his stake in oil producers, most recently closing out his Exxon Mobil (XOM) position entirely. He still maintains small exposure to ConocoPhillips.
Once again, energy appears to be wreaking havoc on Buffett's portfolio. In a section listing Berkshire's lowlights over the past year, the investor noted that his company's decision to spend $2 billion to purchase bond issues of Energy Futures Holding has proven to be a "big mistake." Just as ConocoPhillips tumbled as oil prices fell off a cliff, Buffett's bet on this electric utility operation has floundered as natural gas prices turned south. With the fuel still struggled to find support, the wager will continue to inflict pain. Perhaps the biggest error on Buffett's part over the past year, however, has been his persistent optimism towards the housing market. In this year's letter, the investor offered a mea culpa, noting that, while he expected the residential real estate market to claw back in a year or so, this forecast was "dead wrong."
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV