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Monday 11 December 2017

Even I get it dead wrong sometimes, admits sage Buffett

They call him the Sage of Omaha, but Warren Buffett doesn't always get things right. Just ask him.

In his annual letter to his shareholders, the world's most famous investor has offered a series of colourful apologies for a selection of market predictions which proved wide of the mark. Or, in his own words, went "dead wrong".

A decision to gamble $2bn (¤1.5bn) on a Texan energy company turned out to be "in tennis parlance, a major unforced error".

An investment in Conoco-Phillips was "dumb" and, of an ill-fated foray into the textiles industry, he writes merely: "Aaaaaaagh!"

Mr Buffett's frank comments were published in his firm Berkshire Hathaway's annual report.

They come at a time when he faces widespread scrutiny for endorsing Barack Obama's proposals to raise taxes on the wealthiest Americans.

The letter also comes amid growing interest in Mr Buffett's legacy.

At 81, and after almost half a century running the company, his investors have never been more acutely aware of the fact he cannot carry on for ever.

With this in mind, Mr Buffett revealed he had identified an (as yet secret) individual, apparently from within the business, to be his successor.

He also reiterated plans to devote his $44bn (¤32bn) fortune to good causes, adding that despite his advancing age, he was in "excellent health" and not "going anywhere" if he could help it.

Berkshire Hathaway made $10.3bn (¤7.6bn) in 2011, down from nearly $13bn (¤9.6bn) in 2010. Much of the decline can be blamed on Mr Buffett's insistence a year ago that the US housing market was about to rebound. That prediction was "dead wrong", he admits.

However he is adamant that basic laws of supply, demand, and human population growth must lead to a recovery.

Elsewhere, Mr Buffett has become an object of heated public debate after he endorsed raising taxes on the so-called "one per cent" of wealthiest Americans. He famously pointed out that his earnings were taxed at about 15pc, while his secretary paid twice that.

hnews@herald.ie

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