This blog post originally appeared on RealMoney Silver on Jan. 28 at 7:56 a.m. EST.
"The first rule of investing is not to lose; the second rule is not to forget the first rule." -- Warren BuffettOver the past week, I have outlined the potholes in Berkshire Hathaway's ( BRK.A) investment portfolio and the sharp drop in market value in some of Warren Buffett's largest holdings. It was not my intention to overly dramatize the short-term miscues nor was it my intention to understate the remarkable long-term investment achievements of Warren Buffett. It was my intention to underscore that the strategy of investing in companies that have apparent moats to protect their business -- and these moats have been so dear to Buffett's investment strategy over multiple decades -- could either:
- have been abandoned by the Oracle of Omaha, owing to his reluctance to alter/sell off his strategic and principal holdings and maintain a tax-efficient portfolio approach; or
- have been influenced by his mistaken analysis of the changing competitive landscape facing some of his portfolio companies (in other words, the moat has been flooded!).