Buffett's Underperformers: A Good Bet On A Blue-Chip Rebound?

If we were all as lucky as Warren Buffett, we would be able to make investments in companies like ConocoPhillips COP, U.S. Bancorp USB, Kraft Foods KFT, Sanofi-Aventis SNY, Johnson & Johnson JNJ and Wells Fargo & Company WFC and call them disappointments. You see, in Buffett's world – one where his investments led to the $205 billion stock-market value of Berkshire Hathaway, Inc. BRK – a disappointment appears to be anything less than perfection. Barron's has an interesting article on the Berkshire Hathaway CEO, where it quotes an interview Buffett had with CNBC. "I make plenty of mistakes…That's part of the game. You just got to make sure that the right things overcome the wrong ones." Barron's said that when it comes to the investment in ConocoPhillips, Buffett told CNBC that he erred because he bought it when oil was above $100 a barrel. The shares tanked when crude collapsed, causing Berkshire Hathaway to lose more than $1 billion on that investment. Wells Fargo is one of Berkshire Hathaway's older investments, dating back 20 years. Barron's said that while Buffett has a gain on the banking giant, it is mainly from early purchases of the stock at depressed prices. Meanwhile, Buffett's Coca-Cola KO and Procter & Gamble PG holdings – which date back to the 1980s – are roughly 10 times above the company's cost. The bottom line, Barron's said, is that some of the underperforming stocks in Berkshire Hathaway's portfolio can be bought for less than what Berkshire paid, and the shares could be a good way to bet on a blue-chip rebound.