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Buffett’s Gains Gone


Investing legend and Presidential economic adviser Warren Buffettt, “the Oracle of Omaha”, last week released his annual letter to shareholders of his holding company, Berkshire Hathaway. The resulting headlines were focused on Buffett’s prediction for 2009: The economy will be in shambles.

I haven’t had time to read the whole letter. Jeff Matthews has, and he realized an astounding fact:

Berkshire Hathaway’s portfolio of equities—the stocks such as Coke and P&G and Washington Post that Warren Buffett himself, the “Oracle of Omaha,” famously purchased over the years at bargain prices—appears, as of yesterday’s market close, to be worth not much more than Buffett's cost.

That’s right.

Based on the year-end portfolio presented in the letter … Berkshire’s entire equity portfolio, which had a $37 billion cost basis and a $49 billion market value at year-end 2008, was, as of yesterday’s market close, worth only about $37 billion.

Buffet’s portfolio shows no gain. He’s flat. All his paper gains are gone.

I’m doing about as well as Warren Buffett! Of course, Berkshire is still worth 37 billion, and I’m barely worth the last zero on their balance sheet.

Many tiny players—and 401(k) owners—who have been wiped out over the past year seem to want to portray themselves as victims of Wall Street greed. But isn’t it is hard to sustain a belief that some cabal of fat cats has played you for a sucker when the biggest fish in the ocean has lost all he made, too?

H/T: Naked Capitalism