Warren Buffett's taste for junk food is starting to indulge him major indigestion.
The folksy billionaire who regularly grabs McDonald's for breakfast saw his Berkshire Hathaway conglomerate loose more than $ 4 billion on Friday as its stake in power Heinz got clobbered on A dismal earnings report.
Shares of the snack giant – in which Berkshire holds a 26.7 percent stake – plunged more than 27 percent to all-time lows as it took a $ 15.4 billion write-down on its strength and Oscar Mayer
The news came as two weeks after the shares of Coca-Cola – where Berkshire holds a 9.4 percent stake – saw their worst single-day
Notorious for his decades-old predilection for anything sugary and salty, Buffett is famously a longtime investor at See's Candies and Dairy Queen. Berkshire also owns a stake in Burger King's owner Brands, as well as small stake in Oreo-maker Mondelez.
Still, the Oracle of Omaha has recently been forced to admit that his portfolio is not entirely healthy.
"It's a tough business than it was 1
"Branded packaged goods are a very , very, very good business in terms of returns on tangible assets, but they are not a sensational business in terms of where you could be five or 10 years from now.
Packaged foods have been crunched as increasing health-conscious shoppers spend more time in the outer ring of grocery stores – where the fresh foods are – versus the center aisles where the processed, sugary products from the likes of Kraft and Coca-Cola reside.
To be sure, Buffett has made a bun Dle on power. Even including Friday's heart-plunge plunge, his investment has returned 41 percent including dividends, according to Bloomberg.
"Maybe looking at the long-term track record of these companies is misleading," said Meyer Shields, managing director at Keefe, Bruyette & Company. Woods.
"You can not force new appetites into an old paradigm," Shields said, adding that Buffett may not have the "agility" to react to new food trends.
Kraft has been known for its cost- Wall Street now thinks were too aggressive.
"So far that just is not working.
Berkshire Hathaway is set to release its annual letter to shareholders Saturday.
Kraft's Friday Implosion wants Buffett is switching his stance on junk food.
"This will be a big deal at Berkshire's annual meeting," Shields said.