Hits keep coming for Warren Buffett Warren Buffett
Warren Buffett

Warren Buffett

The sage plant can weather relatively inhospitable conditions. But so volatile has been the stock market climate of late that even the Sage of Omaha has wilted under the strain.
Warren Buffett, arguably the world’s most-respected stock picker, took a big hit on his investment in Coca-Cola on Tuesday, after the beverage giant reported a 14 percent fall in third quarter net income, falling short of analysts’ estimates.

Buffett’s Berkshire Hathaway investment vehicle holds just under 9 percent of Coca-Cola share capital, a stake that became 6 percent less valuable over the course of trade on Tuesday, even as the S&P 500 index surged by 1,6 percent, its biggest gain in a year.

Coca-Cola cited weak international sales growth in unveiling the disappointing figures, echoing the gloomy language employed by Wal-Mart when revealing a downgrade of sales forecasts last week.

Berkshire Hathaway owns just under two percent of the retailing colossus.
Wal-Mart shares have gained traction in recent days, but remain two percent cheaper than before the release of the latest guidance.
There was no such rebound for IBM IBM +0,48 percent, which slid another 3,5 percent on Tuesday, extending Monday’s 7 percent decline after chief executive Ginni Rometty conceded that the computing giant lost its way in negotiating the industry shift to cloud computing.

Amongst IBM’s biggest investors?  One Berkshire Hathaway, which accounts for just under 4 percent of the free float. Buffett has made no secret of his investment strategy; identify undervalued shares, buy and hold for the long term.

So many were surprised when he unloaded a big chunk of his holding in Tesco , the UK’s leading retailer.
Tesco shares have more than halved over the past year, in the wake of three profit warnings in as many months. Last month, the British supermarket chain admitted that first half profits were overstated by nearly $400 million, leading Buffett to refer to the investment as a “huge mistake.”

It’s a conspicuous deviation from Buffett’s much-heralded long-term tactics.
Chief executive Dave Lewis will unveil revised interim figures today, and some analysts believe that the only way for Tesco is up.

The retailer retains a 28 percent share of the British grocery market, although fierce competition is cutting margins across the industry.
Berkshire Hathaway held as much as 5 percent of Tesco share capital back in 2012, an unusually large stake in a UK public company.

Many years ago, Buffett told me of his wariness of the London market, which requires an investor to publicly disclose any holding in excess of 3 percent of issued share capital.

That was after Buffett began quietly building a stake in British drinks company Allied Domecq, then owner of Dunkin Donuts and ice cream chain Baskin Robbins.

Investors in Warren Buffett Inc. are a fiercely loyal bunch.
Shares in Berkshire Hathaway have slipped over the past month, but are still up 18,3 percent on the year.
The S&P 500 index has returned under 11 percent over the same period.

It will take more than a few market storms to inflict lasting damage on the Sage of Omaha, who usually does his best work when other investors are taking flight. — Forbes.

You Might Also Like

Comments

Take our Survey

We value your opinion! Take a moment to complete our survey