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Warren Buffett admits 'thumb-sucking' investment mistake cost $444 million

By Andrew V. Pestano
Warren Buffett is the CEO of Berkshire Hathaway, originally textile firm which has grown into a worldwide conglomerate that has a market cap of about $309 billion. File Photo by UPI/John Angelillo
Warren Buffett is the CEO of Berkshire Hathaway, originally textile firm which has grown into a worldwide conglomerate that has a market cap of about $309 billion. File Photo by UPI/John Angelillo | License Photo

WASHINGTON, March 1 (UPI) -- Billionaire Warren Buffett blamed his slow, "thumb-sucking" management of his investment in supermarket company Tesco for a $444 million loss, the company's biggest since 1975.

In his annual letter to shareholders of Berkshire Hathaway, Buffett, 84, said "an attentive investor, I'm embarrassed to report, would have sold Tesco shares earlier."

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"I made a big mistake with this investment by dawdling," Buffett wrote.

By the end of 2012, Berkshire Hathaway had spent $2.3 billion for 415 million shares of Tesco. Buffett said he "soured" his relationship with the company's management of the time and sold 114 million shares, making a $43 million profit.

"My leisurely pace in making sales would prove expensive," Buffett said.

Buffett, worth about $72 billion, was slow to act even as Tesco, the U.K's largest grocery store chain, was undergoing an accounting scandal. Tesco also issued four profit warnings.

"During 2014, Tesco's problems worsened by the month. The company's market share fell, its margins contracted and accounting problems surfaced," Buffett wrote. "In the world of business, bad news often surfaces serially: You see a cockroach in your kitchen; as the days go by, you meet his relatives."

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"Charlie [Munger, Berkshire Hathaway's vice chairman,] calls this sort of behavior 'thumb-sucking.' (Considering what my delay cost us, he is being kind)," Buffett wrote in the letter.

The investment loss of $444 million is about .0002 percent, a fifth of one percent, of Berkshire Hathaway's net worth.

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