Berkshire Hathaway investor cashes out, bashes Buffett 'thumb-sucking'

A longtime investor called out the famed "Oracle of Omaha" on his way out the door.

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David Rolfe -- the chief investment officer of a St. Louis-based investment firm, Wedgewood Partners, which manages $2 billion -- announced in a third quarter report to clients that, this year, he pulled all of the money he has long held in famed investor Warren Buffett's company Berkshire Hathaway.

He asserted that Buffett has amassed too much cash and been too hesitant to invest in stocks that have made dramatic gains over the last 10 years. Rolfe's firm has been invested in Berkshire Hathaway for 20 years, he said. Buffett, 89, is legendary for his shrewd investments during the course of his oft-praised career. He is also the third richest person in the world in 2019, according to Forbes.

Warren Buffett, Chairman and CEO of Berkshire Hathaway, smiles as he plays bridge following the annual Berkshire Hathaway shareholders meeting in Omaha, Neb., Sunday, May 5, 2019. (AP Photo/Nati Harnik) (AP Photo/Nati Harnik)

"Warren Buffett’s cash hoard of +$125 billion continues to be a considerable impediment of growth. ... Thumb-sucking has not cut the Heinz mustard during the Great Bull Market of 2009-2019," said David Rolfe, in a letter to clients. "The Great Bull could have been one helluva of an astounding career denouement for Messrs. Buffett and Munger." Charlie Munger is the vice chairman of many years of Buffet's company.

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In his report, Rolfe blamed Berkshire Hathaway for failing to see the gains that would occurr in four stocks over the last decade -- Mastercard, Visa, Microsoft and Costco. He further said that Berkshire Hathaway has not done a good enough job communicating with investors as to why it has compiled so much cash, that it made numerous bad stock-picking calls (e.g, Kraft Heinz and IBM), and that its "utilities business (Berkshire Energy) needs continued acquisitions to restart utility growth."

"In terms of errors of omission by Buffett & Co. over the past ten years, a few stocks stand out to us as considerable head scratcher errors that should have been in Buffett’s wheelhouse, and should have been huge winners for Berkshire shareholders," Rolfe said of Mastercard and Visa.

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"Buffett is incredibly well-versed in the payments processing industry given his half-century knowledge in longtime holding American Express," he continued. "These two stocks should have been layups for Buffett. Mastercard and Visa have been massive wealth creators during the Great Bull Market."

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