He's famously nicknamed the Oracle of Omaha, but Warren Buffett has not always had perfect vision while seeing into the future with his investments. And there's one sector in particular that has been a trouble spot for the Berkshire Hathaway (BRK.A 0.95%) (BRK.B 1.11%) icon. In this episode of "The Rank" on Motley Fool Live, recorded on Feb. 28, Fool.com contributor Jason Hall talks about how Buffett has struggled with the energy sector.
Jason Hall: The next one, this goes back when oil was triple digits last time. Last time, there was a major global concern going on, the global financial crisis, and Warren Buffett bought a lots of ConocoPhillips (COP 2.19%) At the time, the ConocoPhillips back then was a fully integrated oil and gas supermajor. It was an oil and gas exploration and production company, refiner, pipeline company. They did it all. Buffett chose to invest billions of dollars in the company, called it at an error of commission when he started exiting the business over the next several years and what essentially happened is he bought the top, I think is really the best way to describe it. At the time, there were concerns about oil and gas access in the US. This was like pre-shale. Bought it on the idea that this was a pretty internationally diversified oil and gas producer so that that would allow it to thrive and then it would be helpful in a triple-digit environment. Needless to say, oil and gas prices didn't stay that high for that long. Buffett bought at the top of the commodity cycle, and it costs shareholders billions and billions of dollars. Now there's a little interesting caveat about this I want to go through real quick before we do our absolute worst one, and this is one that Buffett himself said is probably the worst investment, is that the company ended up being split apart. The oil and gas production business, which is today's ConocoPhillips, and then Phillips 66, which is all the midstream, and refining, and petrochemicals business, which Berkshire has bought and sold at different times and has done some business with and bought some of their subsidiaries. Even through all of that, he still found opportunities there to make a little bit of money. But it's to me, it was like another example of, Buffett has just always struggled with oil and gas scenario. He just never seems to do well in, which probably is familiar for a lot of us.
