‘Sage of Omaha’ sells more Tesco shares

The turmoil at Tesco has triggered a fresh sale of shares by investor Warren Buffett after he labelled his investment in the chain a “huge mistake”.

Warren Buffett of Berkshire Hathaway

The billionaire’s Berkshire Hathaway investment firm has reduced its position in Tesco to below three per cent, having previously held a stake of around five per cent.

It was down to 3.2 per cent earlier this week before the latest regulatory disclosure.

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In a recent interview, Mr Buffett told CNBC: “I made a mistake on Tesco. That was a huge mistake by me.”

Tesco’s shares have slumped 50 per cent since February after a series of profit warnings and last month’s revelation that it had overstated its profits estimate to the City by as much as £250m.

Eight senior executives have been suspended so an inquiry into the error can take place.

Tesco is currently worth around £13.9bn, valuing a three per cent holding at £419m.

The darling of the retail sector during two decades of uninterrupted earnings growth, Tesco has suffered in recent years from failed attempts to break into the United States and Japan. Berkshire Hathaway began building its stake in Tesco in 2006.

Mr Buffett, 84, is the world’s third-richest person and is often referred to as the Sage of Omaha. He oversees a conglomerate with more than 80 businesses, and more than $119bn of stocks. Mr Buffett writes an annual letter to shareholders in Berkshire Hathaway, which is studiedin detail by analysts.

“When we own portions of outstanding businesses with outstanding managements, our favourite holding period is forever, ” he once wrote.