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Warren Buffett's Latest Investing Mistakes

By Matthew Frankel, CFP® - Updated Jun 24, 2021 at 10:08AM

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At Berkshire's latest meeting, the Oracle of Omaha admitted to making a couple of bad moves.

Even the best investors get it wrong sometimes. At Berkshire Hathaway's (BRK.A -0.87%) (BRK.B -0.78%) recent annual meeting, Warren Buffett mentioned two stocks he recently sold that he probably shouldn't have. In this Fool Live video clip, recorded on May 3, Fool.com contributor Matt Frankel, CFP, and Industry Focus host Jason Moser discuss which stocks Buffett regrets selling, and which ones he's glad to be rid of. 

Jason Moser: What was one of Berkshire's bigger mistakes?

Matt Frankel: Well, one of the things was what Buffett said was not a mistake, and that was selling the airlines. Remember he got a ton of criticism for that last year, selling all Berkshire's airlines stocks at big losses after the pandemic broke out, and he would have made billions if he had just hung onto them now that they've rebounded. He said the airlines have been better off without Berkshire involved as an investor and basically, his point is that the government wouldn't have been as willing to bail out the airlines if they had an investor like Berkshire Hathaway backing them up.

Moser: Yeah, that's a good point.

Frankel: So I can see that. The airlines, he says were not a mistake. People wanted to hear that. He did say that it was a mistake that they sold some Apple (AAPL 0.88%) stock last year. He even said that Munger tried to talk him out of it. As we know, Apple is by far Berkshire's biggest stock position, worth well over $100 billion at this point. He sold a small amount, not a ton, but several billion dollars worth. He said that was probably a mistake. He also said it was a mistake exiting Costco (COST 0.60%). If you remember, Berkshire sold out of Costco in the third quarter last year.

Moser: I do remember that. I do remember that.

Frankel: Relatively small investment by Berkshire standards, only $1.3 billion, so peanuts. 

Moser: Well, I'm going to put you on the spot here because I feel like this is always something to talk about and I've got an idea of one I would use. But thinking of a Matt Frankel mistake, something reasonably that stands out to you an investor, a mistake that Matt Frankel made in his portfolio. Does anything stand out to you over the past couple of years, something you did that you wish you didn't do in hindsight? Buy or sell? An error of commission or omission. It could be either or.

Frankel: Well, I probably shouldn't have sold Bitcoin (BTC -2.06%) in 2013.

Moser: Very good. I'm glad. Good. It's humble, that's good.

Frankel: I've talked about this several times. I got it on the early days really just to figure out how it works. Back when Bitcoin was in the single digits.

Moser: Yeah.

Frankel: No one knew that it would get to this point.

Moser: No, shoot, I remember not all that long ago, I sold some Chipotle (CMG -0.54%), not all of it. This was a few years back, but I sold some Chipotle, the majority of the position, to reinvest that money elsewhere. Clearly, selling some of that Chipotle at, I don't know, it was $400 a share of maybe at the time. In hindsight, do I wish I did that? Well, probably could have just left that money alone and it would have done fine, and I reinvested that capital in other investments that are performing well, so I'm not sure. But that's one that I certainly think about from time to time.

Frankel: I have a better, more recent one. So early 2020, we started hearing about this coronavirus that was going around Asia. Remember that?

Moser: Yeah I think I've heard of that.

Frankel: When everyone didn't even pay it any mind. We got the first case, I think it was Washington state had a few cases at first, and everyone's like, it's going to fizzle out, whatever. The market went down in fear of the coronavirus. It wasn't even called COVID-19 at that point.

Moser: Yeah.

Frankel: It went down a little bit and I put a bunch of money to work saying that this is a silly overreaction. In late February, I bought Occidental Petroleum (OXY -0.85%), I bought Goldman Sachs (GS -0.35%), and then the pandemic hit and it turns out everyone was right. I was way too early.

Moser: Yeah.

Frankel: I wish I had put more money to work in late March and not so much in late February. I should've let, at the time, the COVID scare, I should've let it play out a little further, that was a mistake. Now I know to just be patient and let things play out before you react.

Jason Moser owns shares of Apple and Chipotle Mexican Grill. Matthew Frankel, CFP owns shares of Apple, Berkshire Hathaway (B shares), and Goldman Sachs and has the following options: short February 2021 $140 calls on Apple and short May 2021 $140 calls on Apple. The Motley Fool owns shares of and recommends Apple, Berkshire Hathaway (B shares), Bitcoin, Chipotle Mexican Grill, and Costco Wholesale. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short June 2021 $240 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
BRK.B
$304.26 (-0.78%) $-2.39
Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
BRK.A
$457,277.49 (-0.87%) $-4,022.50
The Goldman Sachs Group, Inc. Stock Quote
The Goldman Sachs Group, Inc.
GS
$353.74 (-0.35%) $-1.23
Apple Inc. Stock Quote
Apple Inc.
AAPL
$174.55 (0.88%) $1.52
Chipotle Mexican Grill, Inc. Stock Quote
Chipotle Mexican Grill, Inc.
CMG
$1,705.49 (-0.54%) $-9.19
Costco Wholesale Corporation Stock Quote
Costco Wholesale Corporation
COST
$556.32 (0.60%) $3.30
Occidental Petroleum Corporation Stock Quote
Occidental Petroleum Corporation
OXY
$62.97 (-0.85%) $0.54
Bitcoin Stock Quote
Bitcoin
BTC
$23,372.68 (-2.06%) $-491.62

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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