Warren Buffett admitted Saturday that he invested heavily in aircraft and industrial parts maker Precision Castparts, when his company Berkshire Hathaway spent $32.1 billion in 2016 to acquire the company.
Last August, Berkshire dismissed $9.8 billion in Precision's value as the pandemic depleted demand for air travel and unit products.
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Buffett said in his annual letter to investors, that Precision laid off more than 13,400 jobs, or 40% of its employees in 2020, and it only recently started improving profit margins.
He wrote, "I was wrong in judging the average amount of future earnings and, consequently, I was wrong in calculating the right value of the company. PCC is far from my first mistake of this kind. But it is big."
In 2019, He admitted he was paying too much to Kraft Foods when Berkshire and private equity firm 3G Capital merged it in 2015 with H.J. Heinz Co to establish Kraft Heinz Co.
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Buffett also described his 1993 purchase of Dexter Shoe as the "worst deal" ever, saying he had bought a "worthless company" and compounded his mistake by using Berkshire shares instead of cash to fund the acquisition.
The 90-year-old billionaire wrote, "I'll make more mistakes in the future - you can bet on that."
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