Berkshire Hathaway (BRK-B) released its 2018 annual report and chairman Warren Buffett’s annual shareholder letter over the weekend. In the letter, Buffett admitted, “I will make expensive mistakes of commission and will also miss many opportunities, some of which should have been obvious to me.” To be sure, Buffett has owned his mistakes. Last year, he said he missed out on Amazon (AMZN) and Alphabet (GOOG).
Buffett has faced criticism for not deploying more cash in the fourth quarter and, specifically, for not buying more Apple (AAPL) shares despite the 30% fall in the stock. Buffett also sold Oracle (ORCL) and bought Red Hat (RHT)(IBM) in the fourth quarter. Speaking with CNBC, Buffett said of Apple that, “if it were cheaper, we’d be buying it. We aren’t buying it here.”
Buffett admitted to another mistake with Kraft Heinz (KHC). The stock fell more than a quarter on Friday after announcing a massive write-down and a subpoena. While calling Kraft Heinz a “wonderful business,” Buffett admitted, “I was wrong in a couple of ways about Kraft Heinz.” He added, “We overpaid for Kraft.” Previously, Buffett also said Berkshire overpaid for Precision Castparts, which manufactures components for the aerospace industry (GE)(BA).
Meanwhile, in his annual letter, Buffett lamented a lack of big acquisition opportunities and said Berkshire might deploy more cash into publicly traded securities (SPY) this year. Precision Castparts was the firm’s last major outright acquisition, completed in 2015.
Check out Is Warren Buffett Expecting a Market Crash? for more information.