Warren Buffett lost 4 billion dollars!

Hi everyone, welcome to this new video. 4.3 billion is how much Warren Buffett lost because of the gap down of the Kraft Heinz company. What happened? Well, basically you can see here from the Finviz graph, after earnings there was a huge gap down in price for the Kraft Heinz company. And it happened that Warren Buffett is a big shareholder of this company. Now why this gap down? Well, you can see here on Finviz there are, well, a lot of news as you can imagine after something like that. The drop was, let me highlight, You can see here at 27.46%. Okay. And if you are interested you can go on Finviz, it's one of the websites that I mentioned in a previous video and check the news. Now let's go to the chart again and here you can see what happened. So the price, the trading was around actually we can see here, 48, 18. Right. And it was here. And then after earnings it gapped down and now is at around 35. So it's a very big gap down. Now the thing is that if you look at the news, for example, the one we have here, right, the CNBC, well, Warren Buffett got 325 million shares, right. And that's why this drop of 27% for him was equivalent to 4.3 billion US dollar of loss in a single day. Okay. And the interesting thing is that back in May 2018, Warren Buffett claimed that this company was still a very, very good business. Okay, so what happened? Let's go down and check. Ok. Here you can see again the graph. And yes, we have the news. We have the drop to more than 27% and the loss of Warren Buffett. And you know that Warren Buffett is a value investor. So he will buy companies that are very strong. Right. For example, Coca Cola is another one. And if you go down here, I will put the link of this article in the description. You can see here the holdings of the company of Warren Buffett. So you have the Kraft Heinz here, then you have Coca Cola. And you know, some investors were already saying that Kraft Heinz was losing somehow the competitive advantage. He was losing the strong position that he had in the past. And if you check here, you can see that Warren Buffett also holds Apple. And to me Apple is another case of a company whose branding power is going down. Okay. Now yeah, you can see this news here. Actually what the investors say is that, you see the power behind the Kraft Heinz was basically declining in the past years. So there was, yeah, drop in earnings basically result that were Less than what the analyst expected. Alright, so this is basically the thing. The results that the company shared were not so good. Analysts expect more and then the reaction of the market was very bad. Now if we look at this website, Investors Business Daily IBD that I mentioned in another video, you can also see that now the ranking of this company are not so good. So in terms of group leadership is ranked number 21. And both the EPS rating and SMR rating are not so good. So basically EPS is the earning per share. Of course, after this big drop it makes sense that this number is bad. And then if we have a look at Zucks, that is another website I mentioned in a previous video. Also the ranking of Zax is quite bad. It's a suggestion to sell. So what is the takeaway here? Well, I would say two things. Number one, be careful because earning announcement is a very risky situation. Why? Because of the gap down. I made a video in the past when a similar thing happened, a gap down on Facebook. So the idea is that this gap can happen. And the second thing that I would like to share is this. Don't buy just because some guru buy because you don't know when Warren Buffett bought these shares, of course he got 325 million, but at what price. And also you don't know if he's hedging somehow with other instruments. So it's very risky to just blindly follow what other people are doing. And here you also have a proof that nobody can predict the market. Nobody can know what will happen. Even if someone expert like Warren Buffett can suffer this kind of losses, you can realize that predicting the market is not possible. And from the technical point of view, I also want to highlight here something you see that the company was in a clear downtrend and actually I would say is a channel channel down. Right, you can see the channel here. Alright. And I made a video about channels as well. You may have a look. So in terms of technical, first we had a downtrend and second here we were really close to the top of the channel. So it was a resistance point as well. Yeah. So what I would like to highlight here is again have your strategy. You can check what gurus are doing just for confirmation or for getting some ideas about company. But then use your strategy, use your set of rules and buy only if your rules are respected. Don't just buy because a big guru did it. Okay. And with that I would like to conclude. Thank you for watching. And if you like this video, you can put a like and you can subscribe to this video this channel for receiving the updates when I will upload new videos. See you next time.