Buffett warts revealed in annual letters

NEW YORK: Warren Buffett bought oil stocks near the peak of an energy boom, declined to spend $35 million on a growing television station and swapped a Berkshire Hathaway stake for a shoe company he later said was worthless. In each case, shareholders of Omaha, Nebraska-based Berkshire were charged or deprived of at least $1 billion. And in each case, Buffett apologised in writing.

"A friend once asked me: If you're so rich, why aren't you smart?" Buffett, Berkshire's chairman, said in a letter accompanying the 1996 annual report. The billionaire, describing a bet on USAir, told readers at the time, "You may conclude he had a point".

Buffett's self-criticism is part of a leadership style that has helped him build a company with 2,70,000 workers and draw crowds of more than 20,000 to hear him speak. Buffett, 81, who is scheduled to release his annual shareholder letter on Saturday, relies on his public persona as well as his record to set standards for Berkshire staff and retain investors in good years and bad.

"He does not hesitate to point this stuff out, and it is not just for the shareholders," said James Armstrong, president of Berkshire investor Henry Armstrong Associates.