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S&P 500: These Are Warren Buffett’s 11 Biggest Stock Mistakes This Year

by Atlanta Business Journal

Most S&P 500 stock investors own a few turkeys this year. And Warren Buffett is no exception.




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Even the world-famous investor is holding onto 12 big money-losing stocks this year, including technology play Snowflake (SNOW), financial Nu Holdings (NU) and consumer discretionary RH (RH), says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. All these Berkshire Hathaway (BRKB) holdings are down more than 35% this year.

Overall, Buffett’s Berkshire Hathaway is having a good year. Shares of the diversified investment company are up more than 4.9% this year. And that’s decent when the S&P 500 itself is down more than 16%.

But even the Oracle of Omaha owns S&P 500 stocks that are costing him big money.

No One’s Perfect: Not Even Warren Buffett

If you’re having a tough time in the market this year, know that Buffett is too.

Overall, Buffett has more losers than winners this year. Specifically, 38 of his 50 stocks primarily listed in the U.S., or nearly 75% of his positions, are down for the year. That’s slightly worse than the “hit rate” of the S&P 500, where 7o% of the stocks in the index are down.

Buffett’s losers this year, too, include his largest position that accounts for roughly 40% of his entire portfolio: Apple (AAPL). Shares of Apple are lagging the S&P 500, down more than 18% this year.

The value of Berkshire Hathaway is only up this year due to some huge stock wins. And that’s amazing as he’s holding some pretty large blowups this year.

Buffett’s Melting Snowflake

If you’re looking for Buffett’s biggest black eye this year, it’s Snowflake. Shares of the cloud computing company are down a bruising 58% this year.

Luckily for Buffett, Berkshire Hathaway’s position in Snowflake isn’t huge, valued at just $864 million. He only owns 1.9% of the company. But the big drop still stings, wiping away $1.2 billion from the value of his current position.

Such a massive decline underscores why Buffett avoided technology stocks for so many years. Their businesses — and stocks — can fluctuate wildly. But Buffett seems to have found a technology firm with durable fundamentals.

Snowflake is still expected to make an adjusted profit of $56 million, or 17 cents a share, this year. That adjusted profit is up 1,600% from the previous fiscal year. And revenue this fiscal year at Snowflake is seen jumping nearly 68%.

Amazingly, technology is now Buffett’s No. 1 sector at nearly 42% of the Berkshire Hathaway portfolio.

Other Big Losers For Buffett

It’s been a so-so year for Buffett’s favorite sector: financials. But he’s still taken some lumps there, too.

Buffett’s No. 2 worst stock on a percentage change basis this year is Nu Holdings, a digital financial services company primarily operating in South America. It offers credit and debit cards plus mobile payment services.

But shares are down a crushing 55% this year, wiping away $552 million in value from Berkshire Hathaway’s current position. Again, it’s not a huge position for Berkshire Hathaway, which only own 3% of Nu’s shares outstanding. But its stock is dramatically underperforming the Financial Select Sector SPDR ETF (XLF), which is only down 9% this year.

And again, the fundamentals at Nu are improving even as the stock implodes. Nu is only expected to lose an adjusted penny a share in 2022, better than the 10 cents a year it lost in 2021. Revenue is seen rising 154%.

One of Buffett’s biggest duds that dings the portfolio a little more is high-end furniture seller RH. Berkshire Hathaway owns nearly 10% of the company, which has seen its stock drop nearly 49% this year. That stock collapse wiped away more than $615 million in value from Berkshire’s current position.

And unlike other stock losers where fundamentals are holding up, RH’s profit is caving in a bit. The company’s adjusted profit per share is seen falling 8% this fiscal year and another 15% next fiscal year.

Yes, one year is too short a period to evaluate Buffett. He’s a long-term value investors. But it’s also important to note he’s not afraid to throw in the towel on lousy stocks.

Warren Buffett’s Worst Stocks This Year

Current U.S.-listed holdings down the most on a percentage basis

Company Symbol Year-to-date % stock ch. Unrealized loss on current holding ($ millions) Sector
Snowflake (SNOW) -58.4% -$1,210 Information Technology
Nu Holdings (NU) -55.0 -$553 Financials
RH (RH) -48.7 -$616 Consumer Discretionary
Floor & Decor Holdings (FND) -45.5 -$282 Consumer Discretionary
Ally Financial (ALLY) -45.2 -$646 Financials
Amazon.com (AMZN) -43.6 -$776 Consumer Discretionary
Charter Communications (CHTR) -41.0 -$1,024 Communication Services
Celanese (CE) -40.0 -$653 Materials
StoneCo (STNE) -37.2 -$67 Information Technology
DaVita (DVA) -36.6 -$1,504 Health Care
Paramount Global (PARA) -36.2 -$998 Communication Services
Liberty Latin America (LILA) -35.2 -$1,504 Communication Services

Sources: IBD, S&P Global Market Intelligence

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