Warren Buffett’s Portfolio Losing Billions
Legendary billionaire investor Warren Buffet lost more than $1.7 billion dollars on two of his biggest investments in just two days this week. On Friday, American Express Company (NYSE:AXP) stock, one of Warren Buffett’s top holdings, shed 11.5% of its value on the market.
Warren Buffett, aka the Oracle of Omaha, owns a little over one percent share in the company. As a result of the drop in AXP stock, Warren Buffett’s portfolio lost more than $1.08 billion in a matter of a few hours. Buffett’s portfolio carried AXP stock as its fifth largest holding, with a weighting of more than eight percent.
But it gets worse for Buffett.
Only two days prior to this fiasco, Buffett’s one and only technology pick, International Business Machines Corp. (NYSE:IBM), plummeted more than six percent after reporting disappointing earnings.
Buffett lost in excess of $645 million on IBM stock on Wednesday alone. Although some of these losses were recouped over the following two trading days, the losses still outweigh the gains by a huge margin.
Together, the two stakes take Buffett’s total losses to a whopping $1.7 billion in just two days.
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It is important to note here that the crash in these stocks did not have to do with the widespread downtrend being witnessed on the markets. The common denominator is the soft future guidance delivered by each of the two companies.
American Express reported stellar fourth-quarter results for 2015, beating analyst estimates. However, the strong guidance posted for the year 2016 fell short of Wall Street’s expectations. A massive 2,700,000 shares of American Express were traded on January 22, 2016 following the earnings call.
Likewise, IBM stock also beat Street estimates for the fourth quarter of 2015, but the company issued soft guidance for 2016 that translated into a huge stock sell-off.
This begs one question: will Berkshire Hathaway’s next 13F filing show a slashed interest in these two companies?
Investors have been forewarned. Markets are crashing and nobody is immune—not even the great Oracle of Omaha, Warren Buffett.