Has Buffett's Recent Buy of POOL Stock Been Good for Investors?

Legendary investor Warren Buffett has gotten plenty of criticism over the years. Much of it has stemmed from his decisions to hold on to slumping stocks in his Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) portfolio if he believes in the long-term potential of their underlying businesses. This long-term buy-and-hold strategy has made him a multibillionaire and silenced most of his critics.

However, even Buffett admits that he's made some mistakes over the years. Could Berkshire's recent buy of pool equipment wholesaler Pool Corp. (NASDAQ: POOL) be a mistake? Here's how the stock has treated its investors who bought in before Buffett, and how it might treat investors today.

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1 year: How Pool stock has done for Buffett

Berkshire Hathaway first announced that it had bought shares of Pool about a year ago. Over the past year, though, the stock has been a big underperformer, with shares sliding from about $400 per share a year ago to the $300 per share range by April 2025, and to only about $245 a share today. That's a drop of about 33%, meaning that investors who bought in around the same time as Berkshire have lost roughly one-third of their investment.

That's bad, but things look even worse when you factor in that the S&P 500 has actually risen by about 14% over that time. This means that investing in Pool has underperformed the broader market by about 47 percentage points. Most analysts think the slumping housing market is to blame, as new pool installations occur when a house is built, and major repairs and renovations are likely to happen when a house is being prepared for sale.

But that's just the past year. How has Pool stock done over the longer term?

3 years and 5 years: Medium-term performance

Pool has actually done even worse over the medium term. Its three- and five-year performances are slightly better on an absolute basis, with shares of the stock only down about 26% since November 2022 and 25% since November 2020. But when we factor in the opportunity costs, the results look really bad.

Because the S&P 500 has grown by nearly 75% over the last three years and nearly 100% over the last five years, the opportunity cost of taking a stake in Pool has been massive -- about 100 percentage points over three years and 125 percentage points over five. For investors who bought during the company's peak in late 2021, as lockdown-era pool installations skyrocketed during the pandemic's height, the performance is even worse.

Even the company's small dividend doesn't staunch much of the bleeding. Reinvesting your dividends would have curbed your five-year losses by only about 1.75%.

What's next for Pool

Although Pool's stock is currently in a slump, it's likely to recover once the real estate outlook changes. However, there's no guarantee when that will happen, so investors who take a stake in Pool may need to be very patient indeed.

Pool offers a good lesson, too, that even for buy-and-hold investors, there's no such thing as a "set it and forget it" stock. It's a good idea to monitor your investments at least once per quarter, to make sure you're on track to meet your investing goals.

John Bromels has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.