Buffett bought a large stake in ConocoPhillips stock when oil and gas prices were near their peak. Berkshire increased its stake in the company from 17.5 million shares in 2007 to 84.9 million shares at the end of 2008.
"I in no way anticipated the dramatic fall in energy prices that occurred in the last half of the year," he said. "I still believe the odds are good that oil sells far higher in the future than the current $40-$50 price. But so far I have been dead wrong. Even if prices should rise, moreover, the terrible timing of my purchase has cost Berkshire several billion dollars."
Buffett also spent $244 million on shares of two Irish banks in 2008 "that appeared cheap to me." By the end of the year, they were worth $27 million, an 89 percent loss. The shares have dropped even more since.
Diane Swonk, chief economist at Mesirow Financial, said that although shareholders knew these numbers were coming, it doesn't really ease the blow.
"I think the reality of what we're facing right now and actually seeing the numbers is much harder than knowing that they're coming," Swonk said. "It's hard but Warren Buffett does carry with him integrity, and so when he writes his commentary, people do listen to him and he does have a sense of credibility with him."
With reports from ABC News' Daniela Bilotta