Buffett's Portfolio Takes Another Hit as Wal-Mart Shares Plunge
By Katherine Chiglinsky2 hours ago
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Warren Buffett, chairman and CEO of Berkshire Hathaway, speaks at the Fortune's Most Powerful Women's Summit in Washington October 13, 2015. REUTERS/Kevin Lamarque
Billionaire Warren Buffett’s stock portfolio suffered another setback as Wal-Mart Stores Inc. plunged after predicting profit would decline in its next fiscal year.
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Most of Berkshire’s huge errors “were in not making a purchase, including not purchasing Wal-Mart stock when that was sure to work out enormously well,” Munger wrote in a letter published in February. “Berkshire’s net worth would now be at least $50 billion higher if it had seized several opportunities it was not quite smart enough to recognize as virtually sure things.”
More from Bloomberg.com: Wal-Mart Tumbles Most in 15 Years After Predicting Profit Slump
Wal-Mart’s decline adds to losses this year for Buffett, the second-richest man in the U.S. and a famed stock picker. Wells Fargo & Co., Berkshire’s largest holding, is down about 5.9 percent this year. American Express Co. has fallen 18 percent since Dec. 31 and International Business Machines Corp. lost 6.5 percent. Berkshire slipped 0.4 percent Wednesday, extending its fall for the year to 12 percent.
BlackRock, Vanguard
Buffett built his fortune by focusing on companies’ long-term prospects, and the billionaire frequently says he looks at stock declines as an opportunity to buy more shares. He has also shifted his company’s focus in recent years, buying a railroad and expanding utility operations that limit Berkshire’s reliance on the investment portfolio. He didn’t immediately return a message left with an assistant Wednesday seeking comment on the retailer.
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By Katherine Chiglinsky2 hours ago
.
View photo
Warren Buffett, chairman and CEO of Berkshire Hathaway, speaks at the Fortune's Most Powerful Women's Summit in Washington October 13, 2015. REUTERS/Kevin Lamarque
Billionaire Warren Buffett’s stock portfolio suffered another setback as Wal-Mart Stores Inc. plunged after predicting profit would decline in its next fiscal year.
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Most of Berkshire’s huge errors “were in not making a purchase, including not purchasing Wal-Mart stock when that was sure to work out enormously well,” Munger wrote in a letter published in February. “Berkshire’s net worth would now be at least $50 billion higher if it had seized several opportunities it was not quite smart enough to recognize as virtually sure things.”
More from Bloomberg.com: Wal-Mart Tumbles Most in 15 Years After Predicting Profit Slump
Wal-Mart’s decline adds to losses this year for Buffett, the second-richest man in the U.S. and a famed stock picker. Wells Fargo & Co., Berkshire’s largest holding, is down about 5.9 percent this year. American Express Co. has fallen 18 percent since Dec. 31 and International Business Machines Corp. lost 6.5 percent. Berkshire slipped 0.4 percent Wednesday, extending its fall for the year to 12 percent.
BlackRock, Vanguard
Buffett built his fortune by focusing on companies’ long-term prospects, and the billionaire frequently says he looks at stock declines as an opportunity to buy more shares. He has also shifted his company’s focus in recent years, buying a railroad and expanding utility operations that limit Berkshire’s reliance on the investment portfolio. He didn’t immediately return a message left with an assistant Wednesday seeking comment on the retailer.
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Berkshire’s Wal-Mart holding was accumulated at an average price of about $56 a share, according to his Omaha, Nebraska-based company’s annual report.
Wal-Mart earnings will decrease 6 percent to 12 percent in fiscal 2017, which ends in January of that year, the Bentonville, Arkansas-based company said at its investor day on Wednesday. Analysts had estimated a gain of 4 percent on average, according to data compiled by Bloomberg.
Members of the Walton family are the company’slargest investors. Berkshire holds a stake of more than 2 percent, according to data compiled by Bloomberg. Other top investors include BlackRock Inc. and Vanguard Group Inc., the data show.
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‘Not Happy’
Buffett was also hurt in recent years by declines in U.K. grocer Tesco Plc. He said in February that he took too long to exit his position in that company.
“I have no idea what Buffett will do” with the Wal-Mart stake, Brian Yarbrough, an analyst at Edward Jones & Co., said in an e-mail. But the billionaire is “probably not happy about the news coming out today.” - Warren Buffett Says Most Activist Investors Offer 'Promise of Performance'
