The CEO of Berkshire Hathaway, 90-year-old Warren Buffet stated on Saturday in his annual address to shareholders that his mistake to purchase the Precision Castparts cost his investment fund some $11 billion.
Precision Castparts is an Oregon-based company that manufactures parts for the aerospace industry. The tycoon admitted that he overpaid for the company shares to the value of $37 billion in 2016.
Buffett noted that he "made a mistake" by "paying too much for the company" as he was "too optimistic" about the growth of its profits. As the entrepreneur stressed, his miscalculation became obvious amid the significant decline affecting the entire aviation industry.
"PCC is far from my first error of that sort,” Buffett wrote. “But it’s a big one.”
At the same time, Buffett noted that in spite of the aerospace sector downturn, Precision Castparts remains “the best in its business,” adding that he still believes the manufacturer will eventually “earn good returns.”
According to recent estimates at the end of 2020, Berkshire Hathaway's revenues amounted to about $42.5 billion. Buffet noted that the holding had very successful investments in Apple.
Buffett is the seventh-richest person in the world, according to the latest data from Bloomberg. His fortune is estimated at $92.7 billion. Berkshire Hathaway owns large stakes in dozens of companies. Among them are leading American banks and equipment manufacturers.