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."

Buffett is not unaccustomed to seeing this happen to his crisis-era investments in preferred shares. In March, it was announced that Goldman Sachs ( GS) had received approval to buy back the $5 billion in preferred stock it had sold to the investor in 2008.

Berkshire Hathaway's struggling performance has played a major role in paring back Buffett's wealth. However, the Oracle's philanthropic efforts may have been another factor that contributed to the billionaire's $6 billion decline.

Alongside its list of the richest Americans, Forbes also released a record of the largest charitable gifts given by the ultra-wealthy since 2010. Topping the lift was Warren Buffett, whose donation to the Bill & Melinda Gates Foundation over this time period was valued at $3.27 billion. Rounding out the top five were Stephen Mandel, Len Blavatnik, Mark Zuckerberg, and George Kaiser. These individuals each gave between $96 million and $134 million.

It will be interesting to see what is in store for Buffett as we move ahead. Has the investor's losses over the past year impacted your view of him in any way? Feel free to leave a comment in the space below.

Written by Don Dion in Williamstown, Mass.

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At the time of publication, Dion Money Management did not own any equities mentioned.