Berkshire Hathaway Inc, the insurance company Buffett has run since 1965 and which is holding its annual meeting on Saturday in Omaha, Nebraska, owns close to 80 companies and invests in dozens of stocks.
It is sometimes said that an investor who gets six out of every 10 bets right will be among the top performers. That means even the best investors make mistakes. And while shareholders who have stuck with Buffett for the very long haul have been amply rewarded, the ride has not always been smooth.
Buffett is also a stickler for propriety when it comes to the ethics of making money. In 1991, after he was asked to become chairman of Salomon Inc to clean up a Treasury bidding scandal, Buffett testified before the US Congress: "Lose money for the firm, and I will be understanding. Lose a shred of reputation for the firm, and I will be ruthless."
Buffett had bought $700 million of convertible preferred stock in Salomon four years earlier. The investment ultimately was not one of his best. The following are a handful of Berkshire's investments over the years, the good, the bad and the unknown.
THE GOOD
* In 1976, Berkshire began accumulating an equity stake in auto insurer Geico Corp, 24 years after selling an earlier stake for $15,259. It built that stake to 50 percent and then at the beginning of 1996 paid $2.3 billion for the remainder. The acquisition brought aboard Tony Nicely, who still runs Geico and whose leadership Buffett has lavishly praised, and Lou Simpson, whom Buffett has said would be an obvious candidate to replace him as Berkshire's chief investment officer but for the fact that he, too, is in his 70s. Geico has roughly tripled its US auto insurance market share since Berkshire bought the entire company, ending the year with 7.7 percent and Buffett said January and February showed record growth in policyholders. The insurer generated about 12 percent of Berkshire's revenue in 2008.
* Berkshire owns 200 million Coca-Cola Co shares, an 8.6 percent stake it had accumulated by 1994. The stake was worth $9.05 billion at year end, but Berkshire paid just $1.3 billion for it.
1 May 2009, 2304 hrs IST, REUTERS
Warren Buffett may be the world's most famous investor, but even he doesn't get everything right.
In 1989, Berkshire bought $600 million of preferred stock in Gillette Co, the razor blade maker that had been hurt by the introduction of disposable razors. That investment had grown several-fold by the time Gillette was acquired in 2005 by Procter & Gamble Co. Berkshire still holds most of that stake; at year end, it held a 3.1 percent stake worth $5.68 billion, but for which it had paid just $643 million. Even so, while Buffett in his 1995 shareholder letter characterized Gillette at the time as "our best holding," he also said he made his "biggest mistake" with the purchase, by opting to buy preferred stock rather than common stock.
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