Monday, March 2, 2009

Warren Buffett... Human After All?

Jeff Matthews (is not making this up) on Berkshire Hathaway's recent Chairman's letter:

The shocker is this: Berkshire Hathaway’s portfolio of equities—the stocks such as Coke and P&G and Washington Post that Warren Buffett himself, the “Oracle of Omaha,” famously purchased over the years at bargain prices—appears, as of yesterday’s market close, to be worth not much more than Buffett's cost.

That’s right.

Based on the year-end portfolio presented in the letter (and it has changed only modestly over time, but now excludes two stocks, Burlington Northern and Moody’s, in which Berkshire owns 20% and must report its holdings under the equity method,) Berkshire’s entire equity portfolio, which had a $37 billion cost basis and a $49 billion market value at year-end 2008, was, as of yesterday’s market close, worth only about $37 billion.

This obviously ignores all the dividends and gains / losses over the years, but it shows how a few bad trades (most noticeably his investment in Wells Fargo) can wipe out a ton of gains...