This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Warren Buffett Owns Up to Mistakes

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."

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $132.54 0.00%
FB $80.54 0.00%
GOOG $540.11 0.00%
TSLA $247.73 0.00%
YHOO $43.48 0.00%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs