Buffett's Kraft Heinz investment takes another big hit

Berkshire Hathaway's troubled investment in Kraft Heinz (KHC) is looking even worse this week after the company missed revenue expectations and revealed it will take a $1.2 billion write-down.

The stock closed today at an all-time low of $26.50, down 14% over the two trading days since it announced the write-down Wednesday night.

In February, it wrote down $15.4 billion, amid plunging sales and profits as consumers move away from established brands.

Some analysts also say Berkshire's managing partner in the deal, 3G Capital did too much cost-cutting and and not enough brand development.

In June, Buffett denied a report of tension with 3G or its co-founder, Jorge Paulo Lemann, and endorsed incoming Kraft Heinz CEO Miguel Patricio, a veteran marketer who replaces 3G's Bernardo Hees.

Buffett admited to CNBC in February that "we overpaid for Kraft" in 2015 (but didn't pay too much for Heinz in 2013) and still thinks the combined Kraft Heinz is a "wonderful business."

Bokeh Capital Partners Kim Forrest, on the other hand, tells Yahoo Finance that Kraft Heinz is a "hot mess."

Buffett's not buying much Berkshire

Berkshire Hathaway bought back only $440 million of its own stock in the second quarter, down from $1.7B in Q1, an indication that Buffett and partner Charlie Munger do not see a bargain in Berkshire stock.

The company's cash grew to a record $122.4 billion, an indication they don't see a lot of bargains anywhere.

Bloomberg notes that as stocks were hitting record highs this spring, Berkshire's portfolio saw a net $1 billion of stock sales.

Operating profit fell 11% to $6.1 billion, in part due to more claims at GEICO and lower cargo volumes at its BNSF railroad, blamed in part on "trade policy." 

Hedge fund investor who lost (and won) bet with Buffett is remembered

Protege Partners co-founder Jeffrey Tarrant has died of brain cancer at the age of 63.

Reuters notes that "over 17 years, Tarrant turned Protege Partners into a powerful backer of small hedge funds, often identifying and seeding portfolios before they became widely known and successful."

He was also part of a 2008 million-dollar wager for charity with Warren Buffett. Tarrant and Protege co-founder Ted Seides bet a basket of hedge funds they selected would outperform Buffett's choice, an S&P index fund, over 10 years.

They lost, but Tarrant told the Financial Times, “I’ve had lunches and dinners with Buffett over 10 years, so I feel like I’ve won.” 

BUFFETT AROUND THE INTERNET

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HIGHLIGHTS FROM THE ARCHIVE

As President Trump's escalating trade war with China unsettles markets, farmers, and the IMF, here's a compilation of video excerpts from several years of CNBC's Warren Buffett Archive in which Buffett and Munger discuss China's enormous economic growth and their belief there's too much at stake for both countries to do something "extremely foolish."

BERKSHIRE STOCK WATCH

Berkshire Hathaway Class A shares closed at $300,435 Friday, down 6.4% over the previous four weeks, and down 4.7% from one year ago.

Berkshire Hathaway Class B shares closed at $199.05, down 7.0% over the previous four weeks, and down 4.8% from one year ago.

The benchmark S&P 500 index closed at 2918.65, down 3.2% over the previous four weeks, and up 2.3% from one year ago.

BERKSHIRE'S TOP STOCK HOLDINGS 

Berkshire's top stock holdings by market value, based on today's closing prices. The number of shares held is as of March 31, 2019, as disclosed in the company's May 15 13F SEC filing.

The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.

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