Buffett has also made mistakes.

Daikinghon

In the investment of Tesco, "the investor" Buffett also admits the mistake.

Investment Tesco is a huge mistake

The company has cut its stake in Tesco to less than 3% per cent and is currently holding 245.3 million shares, according to a statement submitted to the London Stock Exchange by Mr. Buffett's Berkshire Hathaway Company ("Berkshire") on 16th.

As of September 24, Berkshire still holds a 3.98% per cent stake in Tesco, which means Berkshire has sold at least $232 million worth of Tesco shares since September 24, according to historical data.

With September 24 as the time benchmark, Berkshire's losses amounted to nearly $750 million trillion in Tesco's investment, based on the shares of Berkshire's still-owned Tesco stake.

Tesco is one of the world's three largest retail companies-the UK Tesco Group is registered in China, while Tesco is the name of Tesco Group's hypermarket operations in China.

In an interview with the media, Mr. Buffett said his investment in Tesco was a "huge mistake". Last year's deal on Tesco was the only loss-making stock in 15 of Buffett's most heavily traded stocks.

As early as 2006, Buffett began to invest in Tesco, the highest percentage of the stock has reached 5%. According to Tesco's share price trend, November 1, 2007, its share price rose to 494.25 pounds/shares at a record high. However, since the fourth quarter of 2013, the price of Tesco has started to fall sharply.

Statistics show that since September 1, 2013, Tesco's share price has fallen by 51.25% per cent.

Because of the financial fraud

Tesco's sales have fallen sharply this year as a result of fierce competition from low-cost operators. In late September, Tesco, under pressure, had to admit its first-half profit of 250 million pounds (about $409 million).

As a effect, Tesco's chief executive and chief financial officer were both dismissed and hired auditors from Deloitte to investigate the company's finances.

According to the current survey, Tesco's books have about $410 million trillion black holes, which have been sold as income from discounted items that have been booked but not yet unsold, while at the same time making their sales costs lower. In fact, Tesco's first-half profit should be 850 million pounds, not the 1.1 billion pounds announced earlier.

"Considering all the problems that Tesco currently needs to address, poor internal audit is the last thing to solve," said Arastel Mackegg, market analyst at IG. A 23% reduction in earnings expectations is not a trivial matter. ”

In fact, the issue of Tesco has emerged in the 2013.

First of all, in the Chinese market, as at the end of August 2013 half a year, Tesco's purchase of Tesco's losses reached 970 million yuan. Since then Tesco by China Huarun million incorporated, the formation of joint ventures, including the proportion of Tesco shares accounted for only 20%.

Meanwhile, in September 2013, Tesco sold its US division, Fresh&easy, in time to show that Tesco's investment in the United States for more than eight years was not only a penny, but also a huge loss of 2 billion euros.

Second, because of the wrong investment strategy, Tesco has shifted its focus to international markets since 2011, while vigorously exploiting international markets while ignoring the UK domestic market. However, the UK's domestic market is close to two-thirds per cent of its share of Tesco's income. Store dirty, lack of manpower and so on the status of Tesco brand credibility greatly impaired.

Moreover, the market share of Tesco has fallen from 30.3% in 2013 to the current 28.9%, given the intense competition in the UK's domestic retail sector.

This also makes the special easy to buy the financial reporting pressure to steep, finally chose the finance false this "shortcut".

"The Warren" is mortal.

In fact, the recognition of investment errors did not Buffett first. Historical data show that, at different times and on different occasions, Buffett has given his own part of the investment choice of "error" evaluation.

In 2008, Mr. Buffett said he had made a serious mistake-increasing its stake in ConocoPhillips when oil and gas prices approached the highest point.

"I was not able to predict the dramatic fall in energy prices in the second half of 2008, and I still think the future oil price will be much higher than the current 40~50 dollar/barrel." But so far I've been so wrong. Even if the price of oil picks up, the timing of my purchase will cost Berkshire billions of of dollars. ”

In 2013, Mr. Buffett, in an interview with "The first financial daily", also disclosed his other failed investment: the 1993 purchase of U.S. shoe companies Dexter. Buffett sees the investment as the worst failure of his life.

"I've spent about 400 million dollars on a shoe company, and I've lost all of it, and the worst thing I've ever bought with Berkshire's stock is that it's worth 4 billion dollars." "said Mr Buffett. Buffett bought Dexter in 1993 at the cost of $420 million worth of Berkshire shares.

And at this year's Berkshire shareholders ' meeting, which is familiar to domestic investors at the annual Buffett Conference, Mr. Buffett also conceded a mistake about investment in Energy's future holding Company (Energyfutureholdings).

Despite his frequent missteps, Mr Buffett has undeniably been hugely successful from an investment perspective.

Berkshire's second-quarter earnings showed that its total operating income amounted to $49.76 billion trillion, thanks largely to a swap deal and profitable growth in several businesses. And the operating income per share of 2634 U.S. dollars, exceeding the market's expected 2482 U.S. dollars, the year-on-year growth of nearly 40%, the earnings per share reached 3889 U.S. dollars, net profit of 6.4 billion U.S. dollars, which investment business income of 1.96 billion U.S. dollars, derivative business income of 101 million U.S. dollars.

Berkshire's share price has reached an astonishing 205,500 dollars/share, with a total market capitalisation of $193.2 billion trillion.