Warren Buffett's decision to invest $358 million in USAir preferred stock in 1989 is often referred to as one of the Oracle of Omaha's biggest mistakes, even though it was anything but. Ultimately, Berkshire Hathaway's investors didn't lose anything from the trade, although it did lose out by not having the capital invested elsewhere.
The figure of $358 million might not seem like much today, considering Berkshire has nearly $1 trillion of assets. Still, at the end of 1989, the group's shareholder equity was only $5.7 billion (up from $3.7 billion in 1988).
From that perspective, a potential loss of $358 million or 9.7% of total shareholder equity (using 1988 numbers) would have blown a massive hole in the firm's balance sheet....
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