Legendary investor Warren Buffett is happy to admit his mistakes when he makes them - but this week his mistakes cost him a lot of money.
Coca-Cola and IBM represent two of the three largest companies in the investment portfolio of Berkshire Hathaway, the holding company owned by Buffett. Both companies reported particularly disappointing third-quarter financial results this week, sending investors' shares of both companies sharply lower. As a result, Buffett has lost an estimated $2.52 billion ("on paper") so far.
It all started on Monday, when IBM (161.79-0.88%) reported third-quarter operating profit of $3.68 per share, much weaker than market expectations of $4.32 per share. Revenue fell 4% to $22.4 billion. By the end of the trading day, the company's stock had fallen 7%, leading to a $1 billion loss for Berkshire Hathaway.
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On Tuesday, beverage maker Coca-Cola (40.62-0.15%) reported a sharp decline in third-quarter revenue, well below analysts' forecasts, and issued a profit warning due to the strengthening US dollar. At the end of the trading day, the stock fell by about 6% and continued its negative trend yesterday. Buffett lost another $1.5 billion as a result.
However, Buffett's only bright spot this week is Wells Fargo stock (50.17-0.56%), his favorite bank, which yielded him a "paper" profit of $816 million.
