Even Buffett Can Make a Mistake

The recent plunge in Heinz-Kraft shares reminds us that even Warren Buffett can make a mistake. A couple of years ago, it might have seemed as though the Sage’s portfolio was impervious to downturns, given its heavy focus on the basics: food chain, railroads and insurance companies. As it happens, his bet on such time-tested brands as Oscar Mayer, Jell-o, Kraft Singles, Kool Whip and Cheez-Whiz has tanked, a victim of changing tastes. Even KHC’s venerable Maxwell House label has fallen on hard times as consumers weaned on Starbucks have developed a serious jones for something more exotic than a cup of joe.

No one is crying for Buffett, though, and Buffett himself seems unconcerned. If you owned auto-insurance giant Geico and Burlington Northern Santa Fe railway, which can carry a ton of freight 500 miles on a single gallon of diesel fuel, would you be worried?

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