Warren Buffett’s Berkshire Hathaway Inc faced a missed opportunity by selling its shares in Costco Wholesale Corporation 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. 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 missed opportunity, Berkshire Hathaway remains a financial powerhouse, boasting a stock portfolio exceeding $300 billion and a market capitalization nearing $840 billion.
It is important to note that this article was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
