Warren Buffett's biggest blunders
The Oracle of Omaha has made several investment missteps in his otherwise stellar career.
By Don Dion, TheStreet
While one of Warren Buffett's greatest strengths is his ability to pick out "sure things," not all of his bets have paid off. In fact, there are a number of investments that have done more harm than good.
US Airways (LCC) is often highlighted as one of Buffett's most costly mistakes. In 1995, he had to write off 75% of his $385 million investment in the company.
Despite that staggering loss, Buffett has not given up on airlines. He currently owns NetJets, a jet-sharing company. As with his previous experience, this airline company has resulted in numerous headaches.
Hoping to turn the company into a profitable venture, he shook up its management in 2009, firing CEO Rick Santulli and replacing him with rumored Buffett successor David Sokol. It will be interesting to see if Buffett will eventually shed this company from the Berkshire Hathaway (BRK.A) portfolio.
ConocoPhillips is another investment Buffett might wish he could take back. The investor started buying shares of the oil giant in early 2006. His position was dramatically increased in 2008 when Buffett attempted to take advantage of soaring oil prices.
The timing was terrible. When oil prices sank, shares of ConocoPhillips followed, resulting in a multibillion-dollar hit for Berkshire Hathaway.
While US Airways and ConocoPhillips hurt Buffett financially, his investment in Moody's harmed his reputation. Post continues after video:
But when he was issued a subpoena to appear in front of the Financial Crisis Inquiry Commission, he supported the firm, saying no one foresaw the crisis.
Buffett recently discussed on CNBC what he considered to be a major blunder: buying Berkshire Hathaway, the one-time textile company that has become his investment base.
Looking back on the deal, Buffett said the move was emotionally driven. In 1964, when he already owned a stake in the firm, he felt that he got ripped off by its management. Seeking vengeance, he took over and fired the person he felt had scammed him.
Buffett is a strong proponent of leaving emotions out of investing. In this situation, that belief was cast aside.
Buffett's mistakes highlight the fact that no one is perfect when it comes to investing. While losses can be tough to stomach, it is important not to become dissuaded.
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These companies won't soar like other plays in the sector, but they make for great income sources.
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