Investors need to remember that Warren Buffett gets it wrong and changes his mind
Warren Buffett is considered by many to be one of the greatest if not the greatest investor in history. Consider that shares of Berkshire Hathaway Inc. (NYSE:BRK.A, NYSE:BRK.B) sold at their IPO in the 1960s for $19, which predated Buffett’s involvement. BRK.A recently changed hands for $245,000, an astounding return of more than 129,000%. That’s a track record that many of the hedge fund tycoons who swear admiration for the Oracle of Omaha couldn’t come close to matching if the flow of funds data is to be believed.
The octogenarian billionaire, though, isn’t perfect. Were you to meet him, I would imagine that Buffett would be the first to admit that he is mortal.
He has made many mistakes during his storied career. Sometimes, he has failed to understand macroeconomic trends and other times he has been stuck with a management team that failed to deliver the performance that he expected.
Warren Buffett also changes his mind.
Buffett has made a huge push into airlines in recent years after showing disdain for the sector for decades. Also, Buffett has also gotten over his aversion to technology and now owns 133,000 shares of Apple Inc. (NASDAQ:AAPL). He also has recently unloaded his most of stake in Wal-Mart Stores Inc (NYSE:WMT), deciding correctly that traditional retailers are going to be screwed over the long run by Amazon.com, Inc. (NASDAQ:AMZN).
In some cases, such as The Coca-Cola Co (NYSE:KO), Buffett seems to be oblivious to the growing consumer unease about the health issues associated with consuming carbonated beverages. The Cherry Coke-loving investor has been associated with KO for decades and now owns more than 9% of the Atlanta-based company.
When Buffett first bought Coca-Cola in 1988, it traded for $2.50 per share adjusted for stock splits. KO now trades for about $43.53. That’s obviously a win for Buffett’s value investing approach. KO, though, hasn’t been much of a plus lately since KO stock has underperformed the broader market for the last 5 years.
Below are examples of investments that didn’t go Buffett’s way. They are in no particular order.
