Worst year on record for America's richest man

Worst year on record for America's richest man



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Influential US investor, Warren Buffett, has revealed that his Berkshire Hathaway group had its worst performance in 44 years in 2008.

Annual income for Berkshire dropped 59% last year, while its net worth plunged by $11.5 billion - £8 billion.

 

Although the annual letter to shareholders outlining the group’s worst year on record probably wasn’t well received, Buffett’s colourful turn of phrase might have made it easier reading. The investment guru wrote: “During 2008, I did some dumb things in investments.”

 

These “dumb things” included a near $3 billion loss after he bought a stake in oil company ConocoPhillips when the crude price was at its peak and spending $244 million for shares on two unnamed Irish banks.

 

Ireland was the first country in the eurozone to go into recession, with the Bank of Ireland and Allied Irish Banks needing rescuing from their government, whilst the Anglo-Irish bank has been nationalised.

 

Buffett stated: “The tennis crowd would call my mistakes ‘unforced errors’.” Staying with the racket sport motif, he wrote that over the past year “investors of all stripes were bloodied and confused, much as if they were small birds that had strayed into a badminton game.”  

 

Looking on to this year, the investor said: “We’re certain that the economy will be in shambles throughout 2009 – and, for that matter, probably well beyond – but that conclusion does not tell us whether the stockmarket will rise or fall.”

 

Offering some advice, Buffett said that the current economic woes were largely down to investors relying on complicated and flawed models: “Beware of geeks bearing formulas.” He warned. 

 

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