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Warren Buffett blames $11 billion in losses on “mistakes”



Even Oracle makes mistakes.

Berkshire Hathaway’s 2020 revenue was $42.5 billion, but on Saturday, CEO Warren Buffett admitted that the group’s performance for the year included rare “mistakes”. “This cost the company US$11 billion.

Omaha’s Oracle stated in its annual letter to shareholders that his poor performance in the 2016 acquisition of Precision Castparts forced Berkshire Hathaway to “shrink” or deduct nearly 11 billion from last year’s bottom line. US dollars.

Buffett called the company’s write-down “ugly.” He blamed himself, saying this was “almost entirely a quantification of the mistake I made in 201

6.”

Berkshire Hathaway, headquartered in Omaha, Nebraska, bought the aerospace manufacturing company for $32 billion.

90-year-old Buffett wrote: “I have paid too much for the company.” “No one misled me in any way-I am too optimistic about PCC’s normalized profit potential.”

Warren Buffett, chairman and chief executive officer of Berkshire Hathaway, is at the center, researching products made by Precision Castparts.
Warren Buffett, chairman and chief executive officer of Berkshire Hathaway, is at the center, researching products made by Precision Castparts.
AP Photo/Charlie Riddle

Due to the pandemic, global airlines are flying much less than last year, and the aerospace industry has suffered severe damage, which makes 2020 a difficult year for PCC.

Buffett wrote: “Last year, my erroneous estimate was masked by the unfavorable development of the entire aerospace industry (PCC’s most important source of customers).”

Buffett insisted on his position and expressed his belief that over time, it will be rewarded handsomely.

On Saturday, April 30, 2016, at the Berkshire Hathaway Inc. (Berkshire Hathaway Inc.) annual shareholder meeting in Omaha, Nebraska, USA, participants passed the Precision Castparts Corp. booth.
Participants passed the Precision Castparts Corp. booth during the Berkshire Hathaway Inc. annual shareholder meeting in Omaha, Nebraska, on April 30, 2016.
Bloomberg via Getty Images

Buffett said: “However, I was wrong in judging the average amount of future earnings. Therefore, I was wrong in calculating the appropriate price to pay for the business.” “PCC is far from my first mistake. . But this is a big one.”

Berkshire Hathaway is still the most expensive stock on the market, and its low-traded “A” shares closed at $364,580 on Friday, up about 6% since the beginning of the year. Its “B” shares were split a few years ago to create an easier-to-tradable stock, which closed at $240.51 on Friday and is up about 7.5% this year.


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