Warren Buffett Tells Shareholders He Did "Some Dumb Thi
โพสต์แล้ว: เสาร์ ก.พ. 28, 2009 9:38 pm
Warren Buffett Tells Shareholders He Did "Some Dumb Things" In 2008
In his annual letter to Berkshire Hathaway shareholders, Warren Buffett says he did some "dumb things in investments" last year.
The letter has just been posted on the company's website.
Buffett admits that "I made at least one major mistake of commission and several lesser ones that also hurt... Furthermore, I made some errors of omission, sucking my thumb when new facts came in that should have caused me to re-examine my thinking and promptly take action."
The mistake of commission: buying a large amount of ConocoPhillips stock just as energy prices were near their peak. Buffett writes, "I in no way anticipated the dramatic fall in energy prices that occured in the last half of the year." He still thinks oil will eventually go well above its current $40-$50 range, "but so far I have been dead wrong."
Even if energy prices do rise, "The terrible timing of my puchase has cost Berkshire several billion dollars."
Buffett also reveals that he spent $244 million for shares of two Irish banks that "appeared cheap" to him. At the end of the year, they were written down to their market price of $27 million, for a loss of 89 percent, and they've continued to drop. "The tennis crowd would call my mistakes 'unforced errors.'"
But he says he's not bothered by the overall "significant decline" in Berkshire's portfolio. "We enjoy such price declines if we have funds available to increase our positions."
Buffett confirms that he sold some stocks he would have preferred to keep to fund Berkshire's purchases of $14.5 billion in fixed-income securities from Wrigley, Goldman Sachs, and General Electric. He calls the holdings "more than satisfactory" based just on the high current yields they are delivering. He says those sales primarily involved Johnson & Johnson, Procter & Gamble, and Conoco.
"I have pledged - to you, the rating agencies and myself - to always run Berkshire with more than ample cash. We never want to count on the kindness of strangers in order to meet tomorrow's obligations. When forced to choose, I will not trade even a night's sleep for the chance of extra profits."
The letter also reveals a 9.6 percent decline in Berkshire's book value per-share last year, making 2008 the company's worst year since Buffett took over in 1965. Book value fell by $11.5 billion during the year.
There has been only one annual decline before this one. In 2001, book value fell 6.2 percent.
Compared to the S&P, however, Berkshire's drop is relatively small. With dividends included, the S&P's book value fell 27.4 percent, giving Berkshire its biggest "win" since 2002.
In the letter, Buffett notes that it was also the S&P's biggest decline during the past 44 years.
"By yearend, investors of all stripes were bloodied and confused, much as if they were small birds that had strayed into a badminton game."
http://www.cnbc.com/id/29441086
In his annual letter to Berkshire Hathaway shareholders, Warren Buffett says he did some "dumb things in investments" last year.
The letter has just been posted on the company's website.
Buffett admits that "I made at least one major mistake of commission and several lesser ones that also hurt... Furthermore, I made some errors of omission, sucking my thumb when new facts came in that should have caused me to re-examine my thinking and promptly take action."
The mistake of commission: buying a large amount of ConocoPhillips stock just as energy prices were near their peak. Buffett writes, "I in no way anticipated the dramatic fall in energy prices that occured in the last half of the year." He still thinks oil will eventually go well above its current $40-$50 range, "but so far I have been dead wrong."
Even if energy prices do rise, "The terrible timing of my puchase has cost Berkshire several billion dollars."
Buffett also reveals that he spent $244 million for shares of two Irish banks that "appeared cheap" to him. At the end of the year, they were written down to their market price of $27 million, for a loss of 89 percent, and they've continued to drop. "The tennis crowd would call my mistakes 'unforced errors.'"
But he says he's not bothered by the overall "significant decline" in Berkshire's portfolio. "We enjoy such price declines if we have funds available to increase our positions."
Buffett confirms that he sold some stocks he would have preferred to keep to fund Berkshire's purchases of $14.5 billion in fixed-income securities from Wrigley, Goldman Sachs, and General Electric. He calls the holdings "more than satisfactory" based just on the high current yields they are delivering. He says those sales primarily involved Johnson & Johnson, Procter & Gamble, and Conoco.
"I have pledged - to you, the rating agencies and myself - to always run Berkshire with more than ample cash. We never want to count on the kindness of strangers in order to meet tomorrow's obligations. When forced to choose, I will not trade even a night's sleep for the chance of extra profits."
The letter also reveals a 9.6 percent decline in Berkshire's book value per-share last year, making 2008 the company's worst year since Buffett took over in 1965. Book value fell by $11.5 billion during the year.
There has been only one annual decline before this one. In 2001, book value fell 6.2 percent.
Compared to the S&P, however, Berkshire's drop is relatively small. With dividends included, the S&P's book value fell 27.4 percent, giving Berkshire its biggest "win" since 2002.
In the letter, Buffett notes that it was also the S&P's biggest decline during the past 44 years.
"By yearend, investors of all stripes were bloodied and confused, much as if they were small birds that had strayed into a badminton game."
http://www.cnbc.com/id/29441086
