• "Thumb-sucking has not cut the Heinz mustard during the Great Bull Market of 2009 2019," Wedgewood Partners' investment chief David Rolfe said in a letter to shareholders.
  • Rolfe highlighted Buffett's missed opportunities, bad investments, and reluctance to deploy his vast pile of cash.
  • Watch Berkshire Hathaway trade live on Markets Insider .

A longtime shareholder in Warren Buffett's Berkshire Hathaway has sold his stake and published a laundry list of complaints about the legendary investor and his conglomerate.

David Rolfe, the investing chief of Wedgewood Partners, dumped his stock after more than 20 years, according to his third-quarter letter to clients . He blamed Buffett's failure to capitalize on gains in several stocks, bad investments, and reluctance to deploy his vast pile of cash.

"Thumb-sucking has not cut the Heinz mustard during the Great Bull Market of 2009 2019," Rolfe said in the letter. "The Great Bull could have been one helluva of an astounding career denouement for Messrs. Buffett and Munger," he added, referring to Buffett's partner Charlie Munger.

Buffett missed out on multiple "layups"

"A few stocks stand out to us as considerable head-scratcher errors that should have been in Buffett's wheelhouse, and should have been good for Berkshire shareholders," Rolfe said.

He highlighted Mastercard's 1,521% gain and Visa's 1,137% gain between the start of the bull market on March 9, 2009, and the end of last month. Then he bemoaned the fact those two stocks together make up just 1.5% of Berkshire Hathaway's equity portfolio. "The current combined weighting should be 15.00%!"

Rolfe also pointed to Costco and Microsoft as missed opportunities.

"Buffett has had at his disposal unrivaled expert tutelage on each company in his hind pocket for years but to no shareholder avail," he said, spotlighting the fact that Munger has been a Costco director for 22 years. Yet Berkshire Hathaway only holds a "whopping" 0.55% stake, Rolfe added, meaning it's largely lost out on Costco's 522% gain during the bull market.

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Rolfe also criticized the so-called Oracle of Omaha for not cashing in on Microsoft's 657% stock gain over the same period, despite his close relationship with Bill Gates, the technology titan's cofounder.

"Buffett probably spends more time talking with Gates (Gates Foundation and bridge playing too) each day than he does with key Berkshire vice-chairman employees Ajit Jain and Greg Abel," he said.

"If Buffett can endeavor to figure out the business models of both Apple and IBM enough to pour multi-billions in stock purchases, then figuring out Microsoft's business model under sensei Gates should have been Remedial Technology 101."

Berkshire made several bad investments

"Recent billions in capital investments in notable mistakes such as IBM, Lubrizol, Precision Castparts and Kraft do not inspire confidence that Buffett & Co. are still at the top of their game," Rolfe said.

Buffett bought almost $11 billion worth of IBM stock at an average price of $170 in 2011, according to CNBC , only to sell his stake in the computing giant at a loss last year. He shelled out nearly $10 billion to buy Lubrizol in 2011, the Wall Street Journal reported , then later learned one of his lieutenants at the time bought a $10 million stake in the chemicals firm before recommending it to Buffett, according to the Guardian .

Berkshire Hathaway bought Precision Castparts at a $37 billion valuation in 2016, dwarfing the industrial manufacturer's $1.5 billion in annual earnings. The industrial manufacturer's profits have been lower than projected, Buffett said at his company's annual shareholder meeting in May. Buffett also admitted to CNBC he paid too much for Heinz to acquire Kraft, and the combined group's shares have plunged amid sales declines, accounting issues, and a $15 billion write-down this year.

Buffett hasn't put his cash to work

"Berkshire's current Breaking Bad-style cash hoard," Rolfe said, "continues to be a considerable impediment of growth, rather than our previous hard expectation of a valuable call option on opportunity in the hands of one of the most elite capital allocators extant."

He criticized Berkshire Hathaway for neither sharing its more than $120 billion in cash with investors nor plowing it into the market. "Buffett seems to abhor returning 'capital paint' to shareholders while his Berkshire canvas is still 'in paint,'" he said. Putting the cash to work "will be paramount if Berkshire Hathaway is to once again regain their former status as a meaningful grower over just baseline US GDP growth."

Rolfe ended by signaling his faith in Buffett could still be restored.

"Any future conviction of ours in Berkshire Hathaway shares will closely mirror that of Buffett's own conviction in Berkshire share buybacks.

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