Rule No.1: Never lose money. Rule No.2: Never forget rule No.1

Just For Thinking ....


The most quoted among investors especially value investors.

Rule No.1: Never lose money. Rule No.2: Never forget rule No.1



Berkshire's biggest losers in 2011

The drag any particular stock has had on the portfolio really depends on the time frame in question. Some have lagged for three years, and some for only one. It's even trickier than that, though, as the portfolio always is changing, making it tough to pinpoint what lost what when. As for the biggest drags we can identify, though ...

• Bank of America: Berkshire doesn't own it any longer, but it was a fairly big holding back in 2010 that he sold in the fourth quarter of that year. Thing is, the stock had lost more than a third of its peak value from 2010 by the time fourth quarter rolled around. That said, note that Buffett still has a Bank of America position via preferred shares, which is doling out a pretty sweet 6% yield. The preferreds also are convertible into common shares at $7.14, but for the time being it's acting like fixed income.
• Bank of New York Mellon: This was purchased some time in the third quarter of 2010, which initially proved to be good timing -- the stock bounced back from $25 then to a peak of $32 by the beginning of 2011. Unfortunately, it hit sub-$18 levels by October of last year, and he still owned most of it then.
• Wal-Mart : Buffett has had it for the whole three-year span. Though it was a minor position (about 3% of the whole portfolio), it still made no meaningful net progress between early 2009 and mid-2011, which didn't help his overall results.
• ConocoPhillips This probably is the biggest drag on the portfolio for the past year, as well as for the past three years. The stock has lost 31% for the past 12 months and has gained just about 19% for the past three years. Buffett acknowledged that he paid too much for ConocoPhillips.

Of those four names, Conoco probably would be categorized as the biggest letdown, even by Buffett himself.

Bottom line

Warren Buffett remains a great investor, but he's not infallible.


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Losing money is part of the Game and after sometime in the stock market it is inevitable!!!