This Is How Much Warren Buffett's Company Missed Out On By Dumping Costco Stock In 2020

© Reuters. This Is How Much Warren Buffett’s Company Missed Out On By Dumping Costco Stock In 2020

Benzinga – by Bibhu Pattnaik, Benzinga Staff Writer.

Warren Buffett‘s Berkshire Hathaway Inc (NYSE: BRK-A) faced a missed opportunity by selling its shares in Costco Wholesale Corporation (NASDAQ: COST) during 2020.

This move, which ended a long-term investment in the retail giant, resulted in a potential loss of approximately $1.5 billion in gains, according to Business Insider.

The shares, sold for an estimated $1.3 to $1.6 billion, would be valued at around $3 billion in today’s market. This substantial financial miscalculation occurred as Costco’s stock prices climbed near-record levels.

Since Buffett’s exit, the company’s stock has soared between 88% and 127% to near-record highs. Those percentage gains are based on Costco’s trading range of $301 to $364 during the period he sold and its $684 stock price as of Friday’s close.

Berkshire Hathaway’s journey with Costco began in 1999, starting with a modest investment that expanded to 4.3 million shares by mid-2020.

Also Read: How Warren Buffett Poured $3B Into This Company During 2008 Financial Crisis And Doubled His Money

Deciding to divest these shares meant missing out on a significant appreciation in Costco’s stock value post-sale.

Buffett has since expressed that the sale of Costco shares was perhaps a misstep, a sentiment he shared during Berkshire’s 2021 shareholder meeting.

“I used them up between Costco and Apple,” Business Insider quoted Buffett saying, adding that the late Charlie Munger, Buffett’s right-hand man, “very likely was right in both circumstances.”

Despite this, Berkshire Hathaway remains a financial powerhouse, boasting a stock portfolio exceeding $300 billion and a market capitalization nearing $840 billion.

Now Read: Warren Buffett’s Success Mantra: ‘The Amount You Are Loved Is The Ultimate Measure Of Success In Life’

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo: Shutterstock

© 2024 Benzinga does not provide investment advice. All rights reserved.

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