Did Buffett Stumble on Pool? A Deep Dive Into His Controversial Investment

Why Buffett Bought In — and Why It’s Not Working Out

Warren Buffett’s legendary status often comes with a caveat: his willingness to stick with long-term bets even when short-term results disappoint. His recent acquisition of Pool Corp shares through Berkshire Hathaway seemed to follow this playbook perfectly. Yet the stock’s disastrous performance over the past 12 months is raising an uncomfortable question — did even the Oracle of Omaha misjudge this one?

The Damage Report: Numbers That Sting

When Berkshire first disclosed its Pool position roughly a year ago, shares were hovering near $400. Fast forward to today, and you’re looking at roughly $245 — a brutal 33% nosedive. Anyone who followed Buffett into the trade has watched a third of their capital evaporate.

But here’s where it gets worse: the S&P 500 climbed approximately 14% during the same window. That means Pool didn’t just lose money — it dramatically underperformed the broader market by a staggering 47 percentage points. You could have bought an index fund and dramatically outpaced Buffett’s handpicked stock pick. The culprit? Most analysts finger the collapsing housing market. New pool installations typically happen during home construction, and major maintenance correlates with homes being prepped for sale. As real estate activity dried up, so did demand.

The Longer View Isn’t Much Better

Zoom out to three and five-year timeframes, and Pool’s relative weakness becomes even more glaring. Yes, the stock is “only” down about 26% over three years and 25% over five years on an absolute basis. But compare that to the S&P 500’s nearly 75% gain over three years and nearly 100% surge over five years, and you’re staring at an opportunity cost of roughly 100 percentage points and 125 percentage points respectively.

For investors who bought near Pool’s pandemic-era peak in late 2021 — when lockdown-fueled pool installation mania seemed unstoppable — the picture is positively grim. Even throwing in the modest dividend yield barely puts a dent in the losses, recovering only about 1.75% of the five-year decline through reinvestment.

A Market Lesson in Patience (or Stubbornness?)

The real estate sector operates on cyclical rhythms, and Pool is acutely sensitive to those cycles. Smart pool monitor technologies and renovation investments accelerate when home values surge, but contract sharply during downturns. Buffett likely believed this current housing slump was temporary, betting that demand would roar back once conditions normalized.

The question remains: was he right? Without a clear catalyst for real estate recovery, investors holding Pool face an indefinite waiting game. This situation serves as a powerful reminder that even legendary investors aren’t infallible, and that buy-and-hold strategies require active oversight. Quarterly portfolio reviews matter, even for the seemingly bulletproof picks from Wall Street’s elite.

The Bottom Line

Pool’s struggles don’t automatically make Buffett’s thesis wrong — just premature. The company’s fundamentals remain sound, and a housing market recovery would likely lift the stock substantially. However, timing is everything in investing, and right now, Pool investors are paying the price for betting on a turnaround that hasn’t arrived. For those considering entry now, patience and conviction in the housing sector’s eventual recovery aren’t optional — they’re essential prerequisites.