Buffett takes $2billion hit in two days

New York: There can’t be any investment without risk. No matter who you are, you can’t place a risk-free bet. Warren Buffett, a world renown investment guru, realised this, albeit at a huge cost  by losing a whopping $2 billion (though in terms of notional value or  market capitalisation). Mr Buffett’s Berkshire Hathaway Inc. lost big time  reportedly some $2 billion after shares of IBM Corp. and The Coca-Cola Co. tumbled on disappointing quarterly results.

 

IBM and Coke are part of what Mr Buffett calls Berkshire Hathaway’s “Big Four” investments, the two others being American Express Co. and Wells Fargo & Co.Mr Buffett is known for shunning the quick buck and focusing on the long-term performance of his investments. Investors across the world follow his investment decisions.“At Berkshire, we much prefer owning a non-controlling but substantial portion of a wonderful company to owning 100 per cent of a so-so business; it’s better to have a partial interest in the Hope diamond than to own all of a rhinestone,” Mr Buffett had said, explaining his company’s strategy.

 

However, IBM and Coke have at least for now revealed chinks in his strategy. Earlier, Mr Buffett himself admitted his investment in Tesco as a “huge mistake”.“Coke is one of Buffett’s largest investments. He holds 400 million shares and his son Howard sits on the beverage company’s board. And he likes the products too. Buffett is often seen enjoying Cherry Coke,” a report in CNN claimed.

 

Despite a few missed targets, investors are loyal to the Sage of Ohama. Despite taking a dent, his company’s shares climbed slightly on Monday and Tuesday, and have risen more than 17 per cent this year far better than the market.